Oil markets witnessed sharp volatility as global leaders weighed options to stabilise energy supplies amid the ongoing conflict in the Middle East. Energy ministers from the Group of Seven nations held an emergency call on Tuesday but stopped short of announcing an immediate release of strategic petroleum reserves. Instead, they requested the International Energy Agency to conduct a detailed evaluation of market conditions before any coordinated action is taken. In response, the agency confirmed that it would convene an extraordinary meeting of member countries to prepare a comprehensive assessment and potential response scenarios.
French Finance Minister Roland Lescure said that all G7 members were prepared to intervene if required to calm markets and ensure supply stability. He noted that the United States was also open to market-stabilising measures. According to Lescure, ministers specifically asked the energy agency to prepare actionable plans for a possible oil stock release so governments can respond swiftly if conditions worsen.
Oil prices, which had surged to their highest levels in more than three years in the previous trading session, reversed sharply and fell by about seven percent on Tuesday. The drop followed comments from US President Donald Trump suggesting that the war in the Middle East could end sooner than expected. His remarks reduced fears of prolonged disruptions to global oil shipments and eased immediate supply concerns in commodity markets.
European leaders are also preparing to address the economic implications of rising energy costs. Later in the day, a high-level call involving German Chancellor Friedrich Merz, Italian Prime Minister Giorgia Meloni, Belgian Prime Minister Bart De Wever and other leaders is scheduled to focus on competitiveness and energy pricing pressures across the region. The discussions reflect mounting anxiety within Europe about the risk of another severe energy shock.
Governments across the continent remain wary of a repeat of the 2022 crisis that followed Russia’s invasion of Ukraine, when record energy prices forced factories to shut down and strained household finances. The current conflict has revived concerns that geopolitical instability could again destabilise fuel markets and disrupt industrial activity.
Europe’s vulnerability stems from structural dependence on imported fossil fuels. Even before the latest crisis, energy costs across the continent were generally higher than those in the United States and China, affecting competitiveness. European Commission President Ursula von der Leyen is expected to outline new measures at an upcoming summit aimed at addressing the politically sensitive issue of energy affordability and supply security.
Von der Leyen emphasised that reliance on costly and volatile fossil fuel imports places Europe at a strategic disadvantage compared to other major economies. She said the present Middle East crisis underscores how external shocks can threaten economic stability. She also acknowledged that the region’s earlier reduction in nuclear power capacity had been a strategic misstep that weakened long-term energy resilience.
The European Union currently imports more than ninety percent of its oil and roughly eighty percent of its natural gas requirements, making it highly sensitive to supply disruptions and price swings. The Group of Seven nations participating in the emergency discussions include the United States, Canada, Japan, Italy, Britain, Germany and France.
