[PREVIEW] IEA/G7 meeting on oil reserve release; G7 leaders call is expected to be held around 14:00GMT/10:00EDT

OVERVIEW

The key event is the IEA reserve-release process. The proposal was circulated to the IEA’s 32 member countries at an emergency Tuesday meeting, and countries are expected to decide on Wednesday whether to proceed.
This would potentially be the largest coordinated release, exceeding the combined 182mln barrels released in 2022 after Russia’s invasion of Ukraine.
Desks remain doubtful that it can solve the physical problem if Hormuz disruption and regional outages persist.

Tuesday 10 March: G7 Energy Ministers on March 10 met with the IEA executive director. They "stood ready" to act but stopped short of a final decision, deferring to the IEA for a formal assessment. The IEA is coordinating with G7 energy ministers.
Wednesday 11 March (Timing TBC): IEA countries are expected to decide whether to proceed. Public reporting does not give a firm decision hour. The decision requires unanimous support from all members; an objection from even one country could delay the plan.
Wednesday 11 March (14:00 GMT/ 10:00 EDT): French President Macron is due to host a G7 leaders’ video call on the Iran crisis and energy prices.

The IEA proposal would be larger than the 182mln barrels released in 2022. The exact proposed volume has not been reported in the WSJ piece
FT reporting earlier in the week said some US officials viewed 300mln–400mln barrels as appropriate.
IEA members hold roughly 1.2bln barrels in public stocks plus another 600mln barrels in mandatory commercial inventories.
The proposal is aimed at offsetting disruption tied to the near-total shutdown of Hormuz, through which roughly one-fifth of global oil supply normally passes.

Goldman Sachs says a release of the size under discussion would offset only around 12 days of its estimated 15.4mln bpd Gulf export disruption.
DBS says an IEA reserve release is not the solution to the crisis and that oil prices will ultimately depend on the duration of the Iran war. DBS also says upside risks can be capped in the near term by periodic strategic signalling like the moves seen in recent days.
Morgan Stanley says even a quick resolution would likely still imply weeks of energy-market disruption.

Hormuz remains the core problem. Shipping industry requests for US naval escorts have been turned down for now because the risk of attack is judged as being too high.
This morning, UKMTO received a report that a cargo vessel was hit by an unknown projectile in the Strait of Hormuz, which has resulted in a fire on board, while the crew is evacuating the vessel.
Saudi Arabia is trying to boost exports via the Red Sea and Yanbu, but shipping data suggests those flows are still far short of what would be needed to offset the loss from Hormuz.
Supply disruption is also spreading beyond shipping. ADNOC has shut the Ruwais refinery after a fire following a drone strike.
Neighbouring producers, including Iraq, Kuwait and the UAE, have already reduced output.

Best case for risk assets / Bearish crude: the IEA process moves quickly, no country objects, the G7 call reinforces coordination, and the market sees a credible near-term buffer.
Base case: the meeting calms the front end and caps extreme spikes, but crude stays supported as the physical disruption is bigger than the policy bridge.
Bullish oil case/ Worst case for risk assets: objections or delay in the IEA process, continued shipping paralysis, more infrastructure hits, or any indication that reserve barrels cannot be mobilised quickly enough.

Whether the release is approved on Wednesday or delayed by objections.
Where the final size falls vs the reported 300-400mln the US demand.
Whether the communication includes the timing of actual barrels to market, not just political approval.
Whether any non-IEA countries are brought into coordination. Reporting says further work is needed on participation and timing, and that coordination with countries such as China and India may be explored.