European leaders and ministers issued urgent warnings about the catastrophic impact of the Iran war on the global economy ahead of the G7 summit of foreign ministers in France on March 26, 2026 [1]. The conflict, initiated by the U.S. and Israel in late February, has caused turmoil in global energy markets, severely restricting supplies of oil and gas to U.S.-allied partners in Europe and Asia [1]. International energy prices have surged as a result of extensive damage to energy infrastructure in Iran and neighboring Gulf states from U.S.-Israeli airstrikes and Iran's retaliatory attacks [1].
Tehran's near-total closure of the Strait of Hormuz, a critical maritime passage for a fifth of global oil and gas supplies, has further exacerbated the supply crisis, with EU leaders describing the situation as "critical" [1]. French Finance Minister Roland Lescure highlighted that 30 to 40% of refining capacity in the Gulf is damaged or destroyed, and Qatari Minister of Energy Saad Sherida Al Kaabi reported that 17% of gas production capacity has been destroyed, with restoration expected to take three years [1].
German Defense Minister Boris Pistorius emphasized that "this war is a catastrophe for the world's economies," noting that European partners were not consulted before the conflict began and asserting, "It's not our war" [1]. Italian Prime Minister Giorgia Meloni warned that the ongoing crisis could cause economic and social consequences affecting more nations, particularly vulnerable ones such as those in Africa [1].
The G7 summit is expected to focus on urging the U.S. to pursue an off-ramp with Iran amid an impasse over a possible ceasefire and the threat of escalation, including potential ground troop deployments [1].
CONCLUSION
The Iran war has triggered a severe energy supply crisis and soaring prices, prompting G7 leaders to warn of catastrophic global economic consequences. With significant damage to Gulf energy infrastructure and the closure of the Strait of Hormuz, restoration is expected to take years, intensifying concerns about prolonged market instability. The G7 summit will center on seeking diplomatic solutions to mitigate further escalation and economic fallout.