Governments and traders spent Monday assessing the energy fallout from the expanding war involving Iran, as disruption around the Strait of Hormuz renewed fears over one of the world’s most important oil corridors. Since the conflict began on Feb. 28, tanker traffic through the strait has largely stalled, raising concern that a prolonged interruption could restrict supply well beyond the Gulf. Brent crude briefly climbed to nearly US$120 a barrel, roughly 65% above its level at the start of the conflict, before retreating toward US$90 as expectations shifted during the session.
The sudden price swings reflected more than immediate shipping constraints. Refining assets have also come into focus as potential vulnerabilities, and investors have begun to weigh the broader economic effect of higher fuel costs on transport, manufacturing, and consumer prices. The AP reported that the war has halted oil tankers, put refineries at risk, and unsettled markets already sensitive to geopolitical shocks.
Governments Weigh Reserves but Hold Back
Despite the sharp rise in prices, major economies have so far refrained from releasing emergency crude stocks. The United States maintains the Strategic Petroleum Reserve, stored in underground caverns in Texas and Louisiana, while other countries hold strategic inventories under national systems coordinated in many cases through the International Energy Agency. AP reported that governments often consult one another before opening those reserves because any coordinated release can reshape global pricing and trade flows.
That caution remained in place this week. According to AP, President Donald Trump played down the need for an immediate drawdown, arguing that supplies were sufficient and that prices would ease. Group of Seven governments also discussed the issue on Monday without approving a release. Reuters separately reported that G7 ministers again refrained from immediate action and instead asked the IEA to continue assessing market conditions and possible scenarios for intervention.
The hesitation underscores how difficult timing can be. Officials must judge whether the disruption is severe enough, whether it is likely to last, and whether releasing reserves too early could reduce their usefulness later. AP noted that strategic stocks have been used in earlier crises, including during conflicts in Iraq and Libya and after Russia’s invasion of Ukraine, but policymakers do not treat such moves as automatic responses.
The Scale of Available Stockpiles
The oil cushion available to governments remains substantial, even if leaders have chosen not to deploy it yet. The U.S. Department of Energy says the Strategic Petroleum Reserve is the world’s largest emergency supply of crude oil. DOE data show the reserve held 411 million barrels at the end of 2025, equal to about 125 days of U.S. net crude imports at that point.
Beyond the United States, the IEA tracks oil stocks held by member countries and requires participating states to maintain emergency coverage equivalent to at least 90 days of net imports. That framework is designed to give governments room to respond to severe disruptions, although releasing oil from those inventories still depends on political agreement and market conditions.
For now, those reserves may be serving a stabilizing role even without a formal drawdown. Public discussion of emergency supplies can reassure traders that governments retain tools to address a deeper shock, especially if transport through Hormuz remains restricted or refinery outages begin to spread.
Energy Costs Become the Wider Business Story
The oil market response is already feeding into a broader business calculation. Higher crude prices can quickly move into diesel, gasoline, jet fuel, and petrochemical costs, placing pressure on freight operators, airlines, manufacturers, and households. Europe, in particular, remains exposed because of its heavy reliance on imported fossil fuels. Reuters reported that the latest surge has revived concerns similar to those seen during the 2022 energy crisis, even as officials argue that conditions are not yet severe enough to justify tapping reserves.
That leaves businesses watching two signals at once: the military trajectory of the conflict and the political threshold for intervention in energy markets. For the moment, governments appear to be betting that the war’s effect on supply may still prove temporary. But with the Strait of Hormuz still central to the outlook, emergency reserves have moved back to the center of economic planning, even before a single additional barrel has been released.
