G7 energy ministers will discuss how to tackle soaring energy prices due to the war in Iran on a call on Tuesday, while a group of European Union (EU) leaders will do so later in the day, officials said.
Oil prices surged to $119 a barrel on Monday, their highest levels in almost four years, on fears of Gulf output cuts and disrupted exports by tanker.
European governments are on edge about the prospect of a repeat of the energy crisis they faced in 2022, when prices surged to record peaks, forcing some industries to shut down, after Russia invaded Ukraine.
Europe Vulnerable
Even before the Iran crisis, European energy prices typically sat higher than those in the U.S. and China. European Commission chief Ursula von der Leyen is due to propose measures to tackle the politically sensitive issue at an EU summit next week.
“For fossil fuels, we are completely dependent on expensive and volatile imports, putting us at a structural disadvantage to other regions. The current Middle East crisis gives a stark reminder of the vulnerabilities this creates,” von der Leyen said, adding that the reduction in nuclear energy had been a strategic mistake in Europe.
The EU imports more than 90% of its oil and around 80% of its gas.
Necessary Measures
Tuesday’s G7 call is scheduled for 1245 GMT. French Finance Minister Roland Lescure, whose country holds the G7 presidency, said there were currently no supply problems in either Europe or the United States.
G7 finance ministers said on Monday they were prepared to implement “necessary measures” in response to the price surge but stopped short of committing to coordinated emergency releases of reserves.
“We want prices at the pump to go down,” Lescure told reporters on Tuesday, adding that “all options are on the table” as talks now take place among energy ministers.
He repeated that “we are not there yet” in terms of releasing strategic reserves, but added that the objective is to ensure things improve “in zones where there are supply tensions, I am obviously referring to Asia.”
The G7 comprises the United States, Canada, Japan, Italy, Britain, Germany, and France.
Japan supports the International Energy Agency’s suggestion of a coordinated release of strategic oil reserves, Industry Minister Ryosei Akazawa said.
EU Leaders Talk
EU leaders in the evening will discuss competitiveness, including energy prices, on a call with German Chancellor Friedrich Merz, Italian Prime Minister Giorgia Meloni, Belgian Prime Minister Bart De Wever, and others.
EU commissioners discussed potential measures last Friday, including changes to energy taxes and amending the EU carbon price, which accounts for roughly 11% of industries’ power costs, a Commission document seen by Reuters showed.
Russia has so far been the only winner from the war in the Middle East as energy prices soar and attention for its war against Ukraine has faded, EU Council President Antonio Costa said.
(With inputs from Reuters)
