The G7 finance ministers gathered in Paris on Monday for a meeting on tackling the world economy's structural fault lines – but one issue loomed large: alleviating the economic fallout from the crisis in the Strait of Hormuz.
“We're going to show that multilateralism is useful and that it works,” said France's Economy and Finance Minister Roland Lescure as he arrived at the meeting. “We're facing major challenges, the war in the Middle East obviously, and multilateral imbalances that are now unsustainable.”
Economy ministers from the UAE Syria, Qatar and Ukraine were also invited to the talks in an expression of “dialogue and solidarity” with states “directly exposed to ongoing crises”, the French presidency of the G7 said. Heads of states are to meet next month in the French spa town of Evian, near the Swiss border.
The world economy has been disrupted by Iran taking control of large parts of the Strait of Hormuz, through which 20 per cent of the world's oil normally passes, following joint US and Israeli attacks launched in late February. About 1,500 ships remain stranded in the narrow channel.
But US President Donald Trump has issued new threats against Tehran after peace talks stalled.
The deadlock has caused oil prices to soar, with strikes and protests in Kenya on Monday after the cost of diesel jumped 50 per cent. Kenya is among a handful of countries to have been invited to attend G7 meetings under the French presidency, alongside Brazil, South Korea and India.
Ministers in Paris were also expected to tackle the resilience and security of critical mineral supply chains, to reduce dependency and protect against future shocks.
Yet Iran appeared to be one of the main concerns for US Treasury Secretary Scott Bessent, who said he would call on G7 finance ministers to follow a sanctions regime in a bid to keep funding from what he described as Iran's “war machine”.
European Economic Commissioner Valdis Dombrovskis said the meeting would discuss the conflicts in Ukraine and Iran. He reaffirmed the need to open the Strait of Hormuz as soon as possible.
Last month, major nations released 400 million barrels of their strategic oil reserves after a phone call between G7 leaders. The move tempered the rise in prices but only temporarily.
Speaking last week, Mr Lescure said there were diverging views on how to tackle global challenges among the G7 members, the US, Canada, the UK, Japan, Germany, Italy and France.
“Discussions are not easy,” Mr Lescure said. “I'm not going to tell you that we agree on everything, including, of course, with our American friends, with whom we have fundamental disagreements, particularly on the future of international trade.”
The G7 was created in 1975 at the initiative of France after the world's first oil shock. The group comprises some of the world's wealthiest countries and currently represents 30 per cent of global GDP.
