G7 and EU discuss energy prices and strategic reserves

Officials said that the G7 energy minsters will discuss the soaring prices of energy due to the war in Iran during a Tuesday call. A group of European Union Leaders will also do the same later in the day.

On Monday, oil?prices soared to $119 per barrel, their?highest level in nearly four years. This was due to fears that Gulf production would be cut and tanker exports disrupted.

The European Union is worried about a possible repeat of the energy crises they experienced in 2022. Prices soared to records and forced some industries to shut down after Russia invaded Ukraine.

VULNERABLE EUROPE

Before the Iran crisis, European prices for energy were higher than in the U.S. or China. Ursula von der Leyen, the European Commission's chief, will be presenting measures at an EU summit in the coming week to address this politically sensitive issue.

"For fossil fuels, we are totally dependent on expensive imports that can be volatile. This puts us at a disadvantage structurally compared to other regions." "The current Middle East crisis is a stark reminder that this vulnerability creates," von der Leyen added. He also said the European reduction of nuclear energy was a strategic error.

The EU imports around 80% and 90% of the gas it uses.

Bring the price of gas down

The 'G7 call on Tuesday is at 1245 GMT. The French Finance Minister Roland Lescure said that there are no current supply issues in Europe or the United States.

G7 Finance Ministers on Monday said they were ready to implement "necessary" measures in response to the recent price spike, but did not commit to a coordinated release of emergency reserves.

Lescure, a reporter on Tuesday, said that "all options" are now on the table as energy ministers begin to talk.

He reiterated that "we're not there yet" when it comes to releasing strategic reserve, but said that the goal is to improve things "in zones with supply tensions - I'm obviously referring Asia."

The G7 consists of the United States, Canada Japan, Italy, Britain Germany and France.

Ryosei Akazawa, Japan's Industry Minister, said that Japan supports the International Energy Agency's proposal of a coordinated release for strategic oil reserves.

EU TALKS

EU leaders will be on the phone in the evening to discuss competitiveness and energy prices with German Chancellor Friedrich Merz. Italian Prime Minister Giorgia meloni. Belgian Prime Minister Bart De Wever.

Last Friday, EU commissioners discussed possible measures, including changes to energy tax and amending the EU Carbon Price, which accounts for approximately 11% of industry's power costs.

Antonio Costa, President of the EU Council, said that Russia has been the sole winner in the Middle East war as the energy prices have soared and the attention on its war with Ukraine has waned. (Reporting from Kate Abnett and America Hernandez, in Brussels; Additional reporting provided by Bart Meijer and Sudip Kar Gupta; Writing by Ingrid Melander & Kate Abnett; Editing by Jason Neely).

(source: Reuters)