Finance ministers from the world’s leading economies (G7) are set to hold emergency talks after a sharp surge in global oil prices rattled financial markets and raised fears of a wider economic shock.
The Group of Seven (G7) will meet at 1.30pm UK time to consider releasing strategic oil reserves in an attempt to calm markets after crude prices jumped close to $120 a barrel overnight. The meeting comes as the energy market faces its most serious disruption in several years.
Britain’s Chancellor will join counterparts from the United States, Japan, Germany, France, Italy and Canada in the urgent discussion. Fatih Birol, executive director of the International Energy Agency, is also expected to take part in the talks.
The move follows a sudden spike in oil prices after the United States and Israel intensified military strikes on targets inside Iran. The conflict has escalated sharply in recent days, with Tehran responding by shutting the Strait of Hormuz , a vital shipping route that carries a large share of the world’s oil supply.
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Energy traders reacted quickly to the disruption. Crude surged beyond $100 a barrel for the first time since Russia’s invasion of Ukraine in 2022. Prices later climbed even higher before easing slightly as reports emerged that the G7 could release emergency reserves. Brent crude was last trading at around $107 a barrel.
The Strait of Hormuz is one of the world’s most important oil corridors. Around 90 per cent of the crude passing through the narrow channel is shipped to Asian economies. Any interruption to this route is likely to have a major effect on global energy supplies.
Stock markets across Asia fell sharply as investors reacted to the growing conflict and the risk of prolonged disruption to oil flows.
Japan’s Nikkei 225 index dropped 4.9 per cent to 52,909.30 as traders sold off shares in response to the rising energy prices and geopolitical tension. South Korea’s markets were hit even harder.
Trading on the Kospi index was halted after a circuit breaker was triggered, marking the second time in less than a week that authorities have been forced to stop trading due to heavy losses. The index had been one of the strongest performers globally earlier this year but fell 6.2 per cent to 5,236.96 amid the turmoil.
The United States said it had carried out strikes on around 3,000 targets inside Iran as the military campaign expanded. The attacks included strikes on key infrastructure and oil storage facilities.
In Iran, supporters of the Islamic Republic staged rallies backing the country’s new leadership as tensions rose across the region.
Former US president Donald Trump defended the military action, arguing on social media that any short-term rise in oil prices was justified if it removed Iran’s nuclear threat.
He said the increase in energy costs was “a very small price to pay” to ensure global security and peace, adding that “only fools would think differently”.
Iran has responded with retaliatory strikes against Israel and several Gulf states. Missiles were reportedly launched towards Saudi Arabia, Bahrain, Qatar, Kuwait and the United Arab Emirates as the conflict widened across the Middle East.
Energy analysts warn that if the Strait of Hormuz remains closed, the impact on oil supply could push prices even higher and increase pressure on governments already battling inflation.
The outcome of the G7 talks will be closely watched by markets, as the potential release of strategic oil reserves could offer short-term relief to global energy supplies and help stabilise prices.
