Iran war-driven oil shock strains G7 economies, but leaders expected to avoid tough talk in France

The U.S.-Iran war that erupted in February briefly shut the Strait of Hormuz and pushed global oil prices up 30% in a month, intensifying inflation pressures and prompting the European Central Bank and the Bank of Japan to raise interest rates last week. Although the U.S. and Iran have agreed to a ceasefire and reopened the strait, markets remain wary that the deal is fragile. Restoring fuel supply chains could take months to as long as a year. The IMF has cut its 2026 global growth forecast to 3.1%, with a worst-case scenario of 2%.