G7 finance ministers convened in Paris with inflation concerns dominating their agenda as the Iran war continues to destabilize global markets. Treasury Secretary Scott Bessent surprised European counterparts by announcing a third sanctions reprieve for Russia, allowing it to sell seaborne oil. The move created immediate tension with European officials who spent years coordinating sanctions against Moscow.

The Iran war has pushed crude prices above $100 per barrel, fueling inflation and dragging on global growth. Despite a joint G7 statement emphasizing the need to "impose severe costs on Russia," the US decision undermined their unified front. France's finance minister Roland Lescure noted the sanctions waiver "was not a G7 decision," highlighting transatlantic divisions on energy policy.

With energy markets in turmoil, the IMF warned that sustained price surges could reduce household purchasing power and force business shutdowns. While many G7 nations pursue renewable energy to reduce reliance on Gulf oil, the Trump administration has diverged from this approach. Canada's finance minister called this "the largest energy challenge we have faced in a generation."