By Avi Salzman and Callum Keown

Oil prices jumped early Monday, briefly trading near $120 a barrel before slipping back under $100. Countries around the world are considering using their oil stockpiles to keep the market well-supplied.

"We stand ready to take necessary measures, including to support global supply of energy such as stockpile release," said the Group of Seven nations in a release after meeting virtually.

The consortium, known as the G-7, includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

Oil shortages linked to the conflict are worsening, and major energy-consuming nations are considering extraordinary actions to contain the surge in prices.

Brent crude futures were up 7.1% at $99.24 on Monday, while West Texas Intermediate futures jumped 6.4% to $96.73. Both benchmarks hit highs of $119.50 overnight before slipping back following reports about the G7's planned meeting.

The G-7 could work through the International Energy Agency, which represents 32 oil-consuming nations, to coordinate a release of some of the 1.2 billion barrels worth of oil they have stockpiled. IEA Executive Director Fatih Birol said on Monday that in addition to the 1.2 billion barrels in government-controlled storage, nations have access to another 600 million barrels worth of industry stockpiles.

Oil and natural gas supplies have been severely disrupted by the war, largely because Middle Eastern energy exports are struggling to move through key shipping routes. The Strait of Hormuz, through which 20% of the world's supply of both commodities flows each day, is effectively blocked. Roughly 16 million barrels a day of crude and oil products can't get to customers, according to Citi analysts. Middle Eastern producers have started to turn off production because they have nowhere to put the oil. Kuwait and the U.A.E. became the latest countries to signal a reduction in oil output on Saturday, after Iraq slashed production last week.

Releasing barrels from strategic reserves could cover the gap, but only for a limited period. "We will see what impact this can make but the duration and intensity of the conflict will still be far and away the most important driver," Deutsche Bank strategist Jim Reid said early Monday.

If members released about a third of their government reserves -- about double what they released after Russia's invasion of Ukraine -- it could cover the shortfall from the war for three to four weeks.

The U.S. and Iran show few signs of nearing a peace deal, though, and the war could last months -- not weeks. Even if the war began to wind down in the next two weeks, it could take weeks for producers that have shuttered production to get it back on line again. "Given the scale of potential disruption, these reserves would also offer minimal relief in a prolonged scenario," wrote Helima Croft, head of global commodities strategy at RBC Capital Markets, last week.

What's more, oil reserves can't cover the looming deficit in natural gas, which is used for heating and electricity. European natural-gas prices jumped 14% on Monday and have now climbed more than 90% since the conflict started.

President Donald Trump said the "short term oil prices" were "a very small price to pay," for safety and peace for the U.S. and the world. He added that he expected prices to drop rapidly once the Iran nuclear threat is over, in a Truth Social post late Sunday.

Trump's comments suggest that surging energy prices won't deter U.S. involvement in the Middle East conflict -- and might partially explain oil's jump overnight.

The appointment of Mojtaba Khamenei as Iran's Supreme Leader -- the son of Ali Khamenei, who was killed in U.S.-Israeli airstrikes -- also signals that the country will continue its hardline stance.

Several events over the weekend threatened even more oil supply and production. Israel hit a number of fuel-storage facilities in Tehran, while Iranian drones struck an oil refinery in Bahrain, The Wall Street Journal reported.

The bombings of Iran's oil depots "suggests a shift in war strategy," Jefferies economist Mohit Kumar said Monday. He added that targeting critical infrastructure would increase the human cost of war, both in terms of civilian casualties and the economic impact. "Market fear would also be around potential counterattacks on oil infrastructure of neighbouring Gulf countries," he added

So where could oil prices go from there?

Goldman Sachs analysts said they could "exceed the 2008 and 2022 peaks, if Strait of Hormuz flows were to remain depressed throughout March," in a note Friday. Oil prices peaked at close to $150 a barrel in 2008.

From a technical standpoint, Brent rising to $200 or even $240 a barrel is "becoming more likely," Andrew Addison, proprietor of the Institutional View research service said in a note Sunday. He said a monthly close above $140 would confirm those upside projections.

Write to Avi Salzman at avi.salzman@barrons.com and Callum Keown at callum.keown@dowjones.com

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March 09, 2026 12:27 ET (16:27 GMT)

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