Countries need clarity on war before tapping oil reserves, France says

{"text":[[{"start":13,"text":"Governments cannot decide whether to release more oil reserves to calm the crisis caused by the Iran war until they know how long the conflict is likely to last, said France’s finance minister. "}],[{"start":24.3,"text":"Asked whether talks over a second release of strategic oil reserves had begun, Roland Lescure told the FT that the issue was not on the table when he hosted finance ministers from G7 nations, including US Treasury secretary Scott Bessent, in Paris earlier this week. "}],[{"start":39.15,"text":"“We cannot release stocks — which are by nature finite — without having visibility on the duration and intensity of the conflict at this stage,” Lescure said in an interview. Even once the Strait of Hormuz does open, it will take several weeks for oil supplies to reach Europe, Asia and other regions, so visibility on the timing of when those flows will restart will be key, he added. "}],[{"start":64.05,"text":"“That would be the kind of moment in which it would make sense to consider the release of reserves to ensure the transition [from] the current phase to the next. The circumstances have not yet come together,” Lescure said. "}],[{"start":76.2,"text":"In March, the 32 countries in the International Energy Agency released a combined 400mn barrels of oil and refined fuel to ease shortages caused by the war. The move helped bring down oil prices and calm volatility in the market, but these reserves will run out over the coming weeks."}],[{"start":null,"text":"

"}],[{"start":94.25,"text":"Such co-ordinated releases are decided on by IEA members, although countries can release their own reserves at will. Paris had also led talks within the G7 on the strategy ahead of the March announcements. "}],[{"start":107.2,"text":"Fatih Birol, IEA executive director, on Thursday said he was “in frequent contact” with his members about the crisis. He said the agency, which was set up in the wake of the 1970s oil crises to manage the world’s strategic reserves, was “ready to act immediately” but “any additional stock release would depend on how the markets evolve and a decision by all our member governments”. "}],[{"start":129.85,"text":"Birol added the current energy crisis is bigger than the shocks of the 1970s and the Russia-Ukraine war “put together”, although government oil reserves have been a cushion. "}],[{"start":140.35,"text":"The oil price fell more than 11 per cent to less than $90 a barrel after the announcement of the first strategic reserve release in March but has since steadily increased. Brent crude, the international benchmark, was trading at $108 a barrel on Thursday. "}],[{"start":157.65,"text":"The economic effects of the Iran war have reverberated globally by slowing growth, increasing inflation and putting pressure on national budgets. The EU on Thursday cut its growth forecast to 0.9 per cent this year, down from a previous 1.2 per cent estimate in November. It also said Eurozone inflation was expected to jump to 3 per cent this year, up from its earlier expectation of 1.9 per cent."}],[{"start":185.1,"text":"Indirect talks between the US and Iran have been under way since early April with a fragile ceasefire in place. But the strait, a narrow artery through which about 20 per cent of the world’s oil and liquefied natural gas is usually transported, remains largely closed because of the risk that Tehran will strike ships. "}],[{"start":null,"text":""}],[{"start":204.65,"text":"Only the reopening of the strait would end the crisis, so the global economy is in limbo until then. The US Federal Reserve left interest rates unchanged in late April, citing the “high level of uncertainty” over the impact of the Iran war, as did the European Central Bank."}],[{"start":221.95000000000002,"text":"In this “extremely uncertain world”, Lescure said, “it was not easy being a central banker” who can “raise rates and regret having done so, or not raise them and regret not having done so”."}],[{"start":234.45000000000002,"text":"“The paradox facing central banks today is this: are we facing a shock that is primarily recessionary, or a shock that risks being stagflationary? And today, we don’t yet know,” Lescure said. "}],[{"start":245.75000000000003,"text":"“Whether stagflationary or recessive, it’s not positive, so the question is whether there are second-order effects or not.”"}],[{"start":253.40000000000003,"text":"In France, public pressure has been growing on the government to do more to protect drivers and businesses from rising fuel prices. But Paris is resisting, as it seeks to hold the line on the already wide deficit of 5.1 per cent of GDP."}],[{"start":267.85,"text":"Unlike the generous aid doled out during the Covid-19 pandemic and Ukraine war, the government initially allocated just €470mn for low-income people and hard-hit industries such as fishing and farming. On Friday, it expanded the aid by another €710mn in recognition that the crisis was dragging on. "}],[{"start":290.55,"text":"French GDP output stagnated in the first quarter, while unemployment hit 8.1 per cent, its highest level in roughly five years. "}],[{"start":299.1,"text":"Lescure said the Iran war had created at least €6bn in extra costs for France, with the bulk coming from up to €4bn in higher interest payments, while tax revenues will be lower than planned. Paris recently downgraded its growth forecast for 2026 to 0.9 per cent from 1 per cent previously. "}],[{"start":318.5,"text":"Lescure said the French economy was proving resilient because of its energy mix based on nuclear power and its protective social welfare system. "}],[{"start":326.85,"text":"“For now, we’re holding up fairly well in the face of headwinds that are undeniable. That’s why I’m talking about orange warning lights rather than red warning lights.”"}],[{"start":344.25,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1779438266_8751.mp3"}