G7 ministers to meet amid warning of consequences of Hormuz closure
An aerial photo shows the Greek-flagged crude oil tanker “Asahi Princess” off the Syrian Baniyas port refinery along the Mediterranean Sea on April 15, 2026.
Bekir Alkasem | Afp | Getty Images
Ahead of a meeting of finance ministers from seven advanced economies in Paris on Monday, a senior European official said the situation in the Middle East underlined how vulnerable the interconnected global economy is to external shocks.
“Opening the Strait of Hormuz and ending the conflict permanently is of great importance in mitigating the impact on the economy,” Eurogroup President Kyriakos Pierrakakis said. expression.
The Eurogroup is the body that brings together euro zone ministers and is represented at the G7 meeting by Pierrakakis, who is also the Greek finance minister. The core members of the G7 consist of the USA, UK, Canada, France, Germany, Italy and Japan.
“The European economy has proven its resilience in the face of this energy crisis. But even if the conflict is resolved quickly, the global economy will feel the pressure,” Pierrakakis said.
Long-term borrowing costs have risen in many G7 economies in recent weeks as investors worry about rising inflation amid tight energy supplies as the Iran war cuts off oil and gas supplies through the vital Strait of Hormuz.
U.S. Treasury yields rose on Friday after a week of mixed inflation data and as investors focused on pricing interest rate policy under new Federal Reserve Chairman Kevin Warsh.
The yield on the 30-year bond increased by approximately 11 basis points to 5.121%, reaching its highest level since May 22, 2025 and approaching its highest level since October 2023.
US 30-year Treasury yield
In the UK, yields on 30-year government bonds, known as gilts, are trading at their highest level since the late 1990s due to political instability and concerns about rising inflation.
Japan, which is particularly vulnerable to inflationary pressure linked to the Iran war, given its status as a major energy importer, has also seen significant increases in bond yields in recent days.
Bond yields and prices move in opposite directions; Traders often demand higher returns on debt investments when trust in the bond-issuing government is shaken.
Meanwhile, oil prices remain high.
July international benchmark Brent crude oil futures closed at $109.26 per barrel, up more than 3%, on Friday. June US West Texas Intermediate futures settled at $105.42 per barrel, up over 4%.
Brent crude oil prices have risen 74 percent since the beginning of the year, but remain below the peak of $118 per barrel reached in late April.
Global oil stocks are falling to record lows to offset major supply disruption in the Middle East and will approach critical levels unless the Strait of Hormuz is reopened.
In its monthly update last week, the International Energy Agency warned that high prices for oil and fuel will likely peak demand this summer.
“The rapid narrowing of buffers due to ongoing disruptions could be a harbinger of future price increases,” the IEA said.
