• G7 finance chiefs call reopening Strait of Hormuz 'of the utmost importance' to avert global economic damage.
  • Shipping traffic through the strait has plunged by 90–95%, triggering a major oil-supply shock.
  • Ministers pledge coordinated measures including increased output from producers and targeted security steps.

G7 finance ministers and central bank governors issued a stark warning on Thursday, declaring that restoring safe passage through the Strait of Hormuz is “imperative” to contain the fallout from one of the largest oil-supply shocks in history. The statement, released after an emergency virtual meeting, signals the group’s willingness to deploy “all necessary measures” to stabilize energy markets, which have seen crude prices surge above $100 per barrel.

“The de facto closure of Hormuz is having a severe impact on global energy supplies and inflationary pressures,” the statement read. “We are committed to taking coordinated action to restore the free flow of oil and gas through this critical chokepoint.”

The Strait, which carries about a third of the world’s seaborne oil and millions of barrels of LNG daily, has effectively been shut by a combination of Iranian drone and missile attacks, mining, and a U.S. naval blockade on Iranian ports. Shipping traffic has dropped by 90–95% compared with peacetime levels, with only a handful of tankers transiting some days, according to maritime tracking data.

Officials from the Group of Seven — Canada, France, Germany, Italy, Japan, the U.K. and the U.S. — emphasized that reopening the waterway is essential to avoid a “stagflation-lite” scenario for advanced economies, where modest growth and above-target inflation persist. They said they would coordinate with oil-producing nations to boost output and prepare targeted financial and security measures to secure safe passage.

“The situation is unprecedented in its scale and persistence,” said a person familiar with the discussions. “This isn’t a temporary spike; insurers and shippers are pricing in elevated risk for months to come.”

Global shipping and insurance markets have already responded sharply, with premiums for vessels transiting the Persian Gulf rising and many carriers rerouting around the Cape of Good Hope, adding cost and transit time.

“We’ve seen a structural shift in trade flows,” said an industry analyst. “Even if Hormuz reopens tomorrow, it will take time for confidence to return.”

The G7 statement also urged the International Energy Agency and Eurogroup to endorse emergency measures, including potential additional strategic oil releases. Meanwhile, in Washington, lawmakers are debating expanded military escorts and anti-mine operations in the Gulf.

“The G7’s economic firepower is significant, but without a diplomatic track, the risk of escalation remains high,” said a security expert. “A durable solution will likely require a mix of de-escalation, multilateral maritime security, and possible sanctions-for-access trades.”

The crisis has already fueled consumer inflation in Europe and Asia, reigniting debates over windfall taxes on oil companies and energy relief for households. In Iran and Gulf states, the conflict is polarizing public opinion, with governments using the crisis to justify increased security spending.

Earlier this year, a similar but less severe disruption in 2019-2020 was managed through coordinated drawdowns and diplomatic pressure. But analysts say the current war-related shutdown is broader and more sustained, with both Iranian and U.S. forces jointly constraining traffic.

“The window for a quick resolution is closing,” the person familiar said. “Every day of closure deepens the economic scars.”