G7 Taps Strategic Reserves as Hormuz Disruption Pushes Brent Near $103
G7 nations will release up to 100 million barrels of crude and diesel over four months as Strait of Hormuz tanker attacks keep oil prices elevated near seven-week highs.
The Group of Seven agreed on October 2 to release as much as 100 million barrels of crude oil and diesel from strategic reserves over the next four months, an emergency measure aimed at steadying energy markets as the Strait of Hormuz remains a contested shipping lane nearly five months into the US-Iran conflict (The National).
The release will run through the International Energy Agency and includes a “front-loaded substantial diesel release” within the first 20 days from G7 members and partner countries, according to the coordinated statement (The National). French President Emmanuel Macron confirmed the scale of the release, which pairs crude and refined-product stocks to address shortages in both categories (Middle East Eye).
G7 leaders also condemned Iran’s attacks on shipping in the region while reaffirming sanctions against Russia, linking the energy-market intervention to the broader conflict rather than treating it as a routine supply adjustment.
Prices still near multi-month highs
The reserve release comes as Brent crude trades close to its highest level in roughly seven weeks. Brent settled at $102.70 a barrel on October 2, up 0.38 percent on the day and roughly 7.5 percent higher over the past month, according to trading data (Trading Economics). The benchmark has climbed from roughly $72 in early July as fighting between the United States and Iran has repeatedly constricted the flow of tankers through Hormuz, the chokepoint that carries roughly a fifth of global oil trade.
Analysts have been raising price forecasts for months as hopes fade for a quick normalization of shipping through the strait, with several now expecting disruptions to persist rather than resolve quickly (OilPrice.com). The market’s reaction has been mixed day to day: some sessions have seen crude gains limited by signs of a partial rebound in flows out of the Gulf, even as the underlying war-risk premium keeps a floor under prices.
That premium is now a direct cost for shipowners. War risk insurance for vessels transiting Hormuz has surged to between 3 and 10 percent of a ship’s hull value, up from roughly 0.25 percent before the war began — meaning a $100 million tanker now carries $3 million to $10 million in war-risk coverage alone, compared with about $250,000 previously (Fairway ETA). Those costs are passed through to cargo owners and, ultimately, to fuel prices at the pump and the diesel used in trucking, shipping, and agriculture.
The strike cycle behind the premium
The elevated insurance costs and the G7’s decision to intervene both trace back to a pattern of tanker strikes that has continued through the fall. The U.S. military struck Iranian oil tankers for the first time in early September under a “tanker for tanker” policy, after Iranian forces targeted U.S. Navy vessels and commercial shipping in the strait. U.S. Central Command said at the time it would respond to attacks on American ships by destroying multiples of Iranian tankers in return.
That retaliatory dynamic has not resolved since. Iran-linked attacks on commercial vessels have continued into October, including the strike on a Kuwaiti-flagged tanker reported this week (/articles/2026-10-03-kuwaiti-tanker-hit-hormuz-strait-attacks-continue/), and Washington has rejected Tehran’s proposal for a phased reopening of the strait (/articles/2026-10-03-trump-rejects-iran-hormuz-plan-rubio-expels-delegation/). The Treasury Department has separately widened sanctions on Iran’s auto, rail, and steel networks that help finance the country’s military and proxy forces (/articles/2026-10-03-treasury-sanctions-iran-auto-rail-steel-networks/).
The reserve release is the clearest sign yet that Western governments view the Hormuz disruption as a structural problem rather than a temporary spike. A hundred million barrels is a significant volume, but it is a buffer, not a fix: global oil consumption runs above 100 million barrels a day, meaning the release amounts to roughly one day of world demand spread over four months. Its purpose is less to replace lost Gulf supply than to blunt price spikes while shipping routes and insurance markets adjust to a conflict that shows no sign of a near-term resolution.
Markets will watch the next OPEC+ meeting and any further escalation around the strait for signals on whether the reserve release is enough to cap prices, or whether sustained attacks on tankers keep pushing Brent toward the $108 highs seen earlier this year (Trading Economics).
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