G7 ministers address financial fallout from Middle East war

With energy markets jolted and anxiety spreading through the global economy, G7 finance ministers and central bank chiefs met today to confront the fallout from the war in the Middle East.

The crisis escalated after the United States and Israel launched strikes on Iran in late February. Tehran responded by targeting crude-exporting states across the region and stopping most shipments moving through the Gulf.

That blow to supply has driven oil and natural gas prices sharply upward, sending disruptive aftershocks through supply chains across a range of industries.

French Finance Minister Roland Lescure said the G7 had brought together finance ministers, energy ministers and central bank officials, marking the first meeting in that format since the group was created in 1975.

“The idea is to keep track of developments and compare assessments, especially on possible disruptions.”

French Finance Minister Roland Lescure said that support measures needed to be swift and targeted

Officials from the International Energy Agency (IEA), the Organisation for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF) and the World Bank also joined the meeting, which was held by video link.

The G7, an informal club comprising the United States, Canada, Britain, France, Germany, Italy and Japan, plays a central role in shaping policy debate among the world’s richest economies.

France currently holds the rotating presidency of the G7 advanced economies.

Washington has been pressing fellow members of the group to back efforts to end Iran’s blockade of the Strait of Hormuz, one of the world’s most important shipping lanes.

Following talks last week, G7 foreign ministers said it was an “absolute necessity” for Iran to restore free passage through the strait and urged a halt to attacks on civilian infrastructure.

‘Move fast’

As pressure mounts, governments in several countries have introduced measures aimed at softening the blow from supply shortages and surging energy costs.

On Friday, the French government said it would allocate €70 million in April to support the fishing, agriculture and transport sectors.

Mr Lescure said any support measures should be focused and delivered without delay.

“This is a crisis that touches all of us and will come at a cost to the nation,” he told reporters.

He said governments needed to “move fast and act fairly.”

US officials, including President Donald Trump, have said their war aims are close to being met, even as thousands of US personnel have been deployed to the region in an unprecedented military build-up.

Activists based outside Iran say the US-Israeli campaign has killed more than 3,000 people in the country, more than half of them civilians. Lebanese officials, meanwhile, say more than 1,000 people have been killed there since Israel began striking its territory in retaliation for Hezbollah attacks on 2 March.

Authorities in Israel and across Gulf states have also reported lower casualty figures on their side.