The Group of Seven (G7) released an important signal just hours before a key summit, expressing in principle support for the use of strategic oil reserves to address the turmoil in the energy market caused by the Iran war.
According to Bloomberg, G7 energy ministers stated in an email statement on Wednesday that they would work closely with the International Energy Agency (IEA) to monitor energy market trends and coordinate within the G7 as well as with international partners, IEA member countries, and other nations.
The G7 energy ministers added that they are in principle supportive of &#34;taking proactive measures to address this situation, including the use of strategic reserves.&#34;
It is worth mentioning that the current G7 rotating presidency, French President Macron, will convene G7 leaders for a video summit at 22:00 Beijing time on Wednesday, focusing on the Iran crisis and the sharp rise in energy prices.
The discussion during this video call will center on the &#34;energy situation&#34; and the issue of the Strait of Hormuz, with a clear indication that &#34;I doubt this will be merely a verbal intervention.&#34; If G7 leaders announce substantial measures after the meeting, it will trigger significant fluctuations in oil prices for the third consecutive trading day.
<h2>Energy Ministers' Meeting: Principle Support, No Final Decision Yet</h2>
On Tuesday, G7 energy ministers held a video conference with the International Energy Agency (IEA) to discuss the impact of the Iran war on the energy market and supply. After the meeting, the energy ministers issued a joint statement on Wednesday, stating that they are &#34;closely monitoring energy market dynamics with the IEA and strengthening coordination within the G7 and with international partners and IEA member countries.&#34;
The statement also warmly welcomed the meeting of the IEA Council held that day, calling it a &#34;critical opportunity&#34; for member countries to assess current supply security and market conditions.
However, according to Reuters, the energy ministers did not reach an agreement on releasing strategic oil reserves during the Tuesday meeting, instead requesting the IEA to assess the current situation before taking action. The wording of &#34;in principle support&#34; in this statement indicates that specific action plans are still pending final approval at the leadership level summit.
<h2>Oil Prices Experience Severe Fluctuations This Week, Market Highly Sensitive</h2>
This week, oil prices have undergone two rounds of significant fluctuations, with the market being extremely sensitive to any policy signals. On Monday, benchmark oil prices soared to nearly four-year highs; on Tuesday, following Trump's prediction that the Middle East conflict might soon end, oil prices plummeted by 11%; on Tuesday evening, a tweet from the U.S. Energy Secretary, which was seen as a &#34;miscommunication,&#34; stated that the U.S. Navy had successfully escorted an oil tanker through the Strait of Hormuz, causing oil prices to drop by another 20%.
Against this backdrop, the outcome of the G7 leaders' summit is of great concern to the market. If substantial reserve release measures are announced afterward, it will exert direct downward pressure on oil prices; if it remains merely verbal statements, the market reaction may be relatively limited

A heavy signal was released just hours before the G7 summit — the energy ministers of the Group of Seven have expressed principle support for the use of strategic oil reserves to respond to the impacts of the Iran war. This week, oil prices have already fluctuated sharply twice, with a maximum single-day drop of 11%. At 22:00 Beijing time tonight, Macron will convene a video summit of G7 leaders, and if substantial actions are announced after the meeting, oil prices may experience a significant fluctuation for the third time this week

- The G7 has indicated its support for utilizing strategic oil reserves in response to energy market turmoil caused by the Iran conflict.  
- Energy ministers will cooperate closely with the International Energy Agency and monitor market trends, but no consensus was reached on releasing reserves during a recent meeting.  
- Market reactions are highly sensitive, and substantial measures announced during the upcoming G7 summit could significantly impact oil prices.

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Before the meeting, a leak? G7 Group: In principle, supports the use of strategic oil reserves