In a joint statement issued during a ministerial meeting hosted by France, the group said it had emphasized the need to minimize harm to civilian populations, regional partners and essential infrastructure amid intensifying hostilities.

The statement reflected mounting concern among major economies over the humanitarian and systemic risks posed by the conflict.

The ministers underscored that safeguarding non-combatants and public infrastructure remains a priority under international norms, as recent strikes have reportedly affected energy facilities and other civilian-linked assets in the region. They stressed coordination among allies and partners to contain spillover effects.

The G7 highlighted potential disruptions to global supply chains, including energy, fertilizer and broader commercial flows, noting that such shocks could have direct consequences for domestic economies and consumers.

The ministers said efforts were underway to mitigate these risks through coordinated policy responses and international norms.

The statement also reiterated the importance of restoring safe and toll-free maritime navigation through the Strait of Hormuz, a critical chokepoint for global oil shipments.

Any prolonged disruption in the corridor could exacerbate volatility in energy markets and strain international trade routes.

The G7 comprises the United States, United Kingdom, Canada, France, Germany, Italy and Japan, along with the European Union.

The high-level statement came just days after Israel launched preemptive strikes on Iranian military installations—an operation it claims was aimed at preventing Tehran from advancing toward nuclear weapon capabilities. Iran responded with retaliatory attacks, triggering a new phase in the already volatile regional dynamics since the outbreak of the Gaza war in October 2023.

“We affirm that Israel has a right to defend itself. We reiterate our support for the security of Israel,” read the G7 communiqué, which also emphasized that “Iran is the principal source of regional instability and terror.”

The leaders of the G7—comprising the United States, United Kingdom, France, Germany, Italy, Canada, and Japan—also reiterated a critical demand: “Iran can never be allowed to possess a nuclear weapon.”

Rising Death Toll and Escalation Fears

The conflict has already resulted in tragic civilian casualties. Iranian sources report over 220 deaths, including women and children, while Israel has confirmed 24 civilian fatalities. Both sides have accused each other of targeting civilian infrastructure, heightening fears of further escalation.

On Monday, an Israeli airstrike reportedly targeted Iran’s state broadcaster headquarters, intensifying panic among Tehran’s residents. U.S. President Donald Trump, attending the G7 summit in Canada, abruptly announced his early departure to return to Washington, citing the urgent regional developments.

In a social media post, Trump warned: “Everyone should immediately evacuate Tehran.”

U.S. Stance: Awareness Without Involvement?

While the United States has publicly distanced itself from direct involvement in the Israeli operations, Trump admitted that Washington had prior knowledge of the strikes and called them “excellent.” Nevertheless, the U.S. has issued stern warnings to Iran not to retaliate against American personnel or assets stationed in the region.

U.S. Secretary of State Marco Rubio held a series of calls with foreign counterparts in Europe to coordinate diplomatic responses and assess regional fallout. Despite the heated tensions, Washington maintains that it still seeks a nuclear agreement with Iran—underscoring the fragile balance between deterrence and diplomacy.

Nuclear Standoff: Two Realities

Iran has long denied ambitions to build nuclear weapons, insisting its nuclear activities are for peaceful energy purposes as permitted under the Nuclear Non-Proliferation Treaty (NPT), to which it is a signatory.

In contrast, Israel—while not a party to the NPT—is widely believed to possess an undeclared nuclear arsenal. It neither confirms nor denies this status, maintaining a policy of strategic ambiguity.

Call for Regional De-escalation and Gaza Ceasefire

Beyond the immediate hostilities between Israel and Iran, the G7 emphasized the need for a broader ceasefire across the Middle East, including Gaza.

“We urge that the resolution of the Iranian crisis leads to a broader de-escalation of hostilities in the Middle East, including a ceasefire in Gaza,” the statement read.

The G7 also expressed readiness to collaborate in ensuring energy market stability, amid concerns that the conflict could disrupt global oil supply lines and inflate prices.

As tensions remain high, international observers warn that without swift and strategic diplomacy, the Israel-Iran showdown could spiral into a multi-front conflict with far-reaching global implications.

The G7 on Wednesday announced a direct ban on Russian diamonds starting Jan. 1 followed by phased-in restrictions on indirect imports of Russian gems from around March 1.

The implementation of the decision will depend heavily on India, home to 90% of the world’s cutting and polishing of the rare gems.

“We are not happy with the announced timeline for implementation of restrictions,” Vipul Shah, chairman of the Gem Jewellery Export Promotion Council (GJEPC) said in a statement.

“Recognising the diversity of our industry, we believe there should be more flexibility in these timelines,” he said.

The GJEPC said that it would collaborate closely with the World Diamond Council (WDC) and other stakeholders to minimize potential disruptions for small and marginal diamond units, which employ millions of people.

The Indian industry has already been facing tough times, with exports of cut and polished diamonds plummeting by 29% from a year ago to $9.96 billion during April to October, according to data compiled by GJEPC.

Indian diamond units stopped buying Russian diamonds long ago and are unlikely to face any challenges in complying with the G7 rules, said Colin Shah, managing director of Kama Jewellery.

Russia’s share in India’s rough diamond imports has decreased to a negligible level from around 30% a few years ago, he said.

His comments point to a divergence of vision as leaders of the bloc – Brazil, Russia, India, China and South Africa – arrived in Johannesburg for a summit that will weigh expanding the group as some members push to forge it into a counterweight to the West.

Heightened global tensions provoked by the Ukraine war and Beijing’s growing rivalry with the United States have pushed China and Russia – whose President Vladimir Putin will attend the meeting virtually – to seek to strengthen the BRICS bloc.

Their vision of an expanded BRICS capable of rivaling U.S. and European global dominance has, however, been met with skepticism by some members. And the outcome of the debate over enlargement could determine the future of a bloc long criticised for a lack of cohesion.

“We do not want to be a counterpoint to the G7, G20 or the United States,” Brazil’s Lula said on Tuesday during a social media broadcast from Johannesburg. “We just want to organise ourselves.”

Summit host South Africa welcomed China’s Xi Jinping, the leading proponent of enlarging BRICS, for a state visit on Tuesday morning ahead of meetings with the grouping’s other leaders planned for later in the day.

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“I am confident that the upcoming summit will be an important milestone in the development of the BRICS mechanism,” Xi said shortly after his arrival in South Africa.

South African President Cyril Ramaphosa said during a bilateral meeting with Xi that their two countries had “similar views” regarding expansion.

“We share your view, President Xi, that BRICS is a vitally important forum which plays an important role in the reform of global governance and in the promotion of multilateralism and cooperation throughout the world,” he said.

Indian Prime Minister Narendra Modi are also attending the Aug. 22 to 24 summit.

Putin, who is wanted under an international arrest warrant for alleged war crimes in Ukraine, will not travel to South Africa.

[1/9]Brazil’s President Luiz Inacio Lula da Silva gestures during a ministerial meeting to celebrate the first 100 days of his government at the Planalto Palace in Brasilia, Brazil, April 10, 2023. REUTERS/Ueslei Marcelino/File Photo Acquire Licensing Rights

Beyond the enlargement question, boosting the use of member states’ local currencies is also on the summit agenda. South African organisers, however, say there will be no discussions of a BRICS currency, an idea floated by Brazil earlier this year as an alternative to dollar-dependence.

POINT OF CONTENTION

BRICS remains a disparate group, ranging from China, the world’s second biggest economy now grappling with a slowdown, to South Africa, an economic minnow facing a power crisis that’s led to daily blackouts.

Russia is being hammered by sanctions over its war in Ukraine is keen to show the West it still has friends.

India, however, has increasingly reached out to the West, as has Brazil under its new leader.

Two members – India and China – have periodically clashed along their disputed border, adding to the challenge of decision-making in a group that relies on consensus.

Expansion has long been a goal of China, which hopes that broader membership will lend clout to a grouping already home to some 40% of the world’s population and a quarter of global GDP.

The leaders will hold a mini-retreat and dinner on Tuesday evening where they are likely to discuss a framework and criteria for admitting new countries.

Russia is keen to bring in new members.

India, which is wary of Chinese dominance and has warned against rushing expansion, has “positive intent and an open mind”, Foreign Secretary Vinay Kwatra said on Monday. Brazil, meanwhile, is concerned that expanding BRICS will dilute its influence, though Lula reiterated on Tuesday his desire to see neighbour Argentina join the bloc.

While a potential BRICS enlargement remains up in the air, the grouping’s pledge to become a champion of the developing world and offer an alternative to a world order dominated by wealthy Western nations is already finding resonance.

Over 40 countries have expressed interest in joining BRICS, say South African officials. Of them, nearly two dozen have formally asked to be admitted, with some expected to send delegations to Johannesburg.

The approach reflects a desire by Washington to encourage buyers to adhere to the $60 per barrel cap imposed last December on sea-borne exports of Russian crude by the G7, the European Union and Australia in retaliation for Russia’s war on Ukraine.

The administration is expected to use “soft” tactics, instead of widespread threats of harsh enforcement on potential violators as that could upend energy markets, they said.

“The initial inclination on the part of Treasury is to be soft on it, not to come down like a hammer on tankers and tanker owners, to enforce, but enforce quietly with letters, phone calls,” said a source familiar with the administration’s thinking on the matter.

U.S. officials will likely increase communications with trading houses, tanker owners, insurers and others, reminding them that if western maritime services are used, attestations must be kept showing Russian oil was bought under $60, the source said.

A Biden administration source said such conversations with service providers about their requirements have been constant during the implementation of the caps.

“We’ve been having these types of conversations already and they will continue,” the source said.

The price cap bans Western companies from providing services such as transportation, insurance and financing for the oil sold above the cap.

According to Reuters data, Russian Urals crude has been trading at or above the cap for nearly two weeks. Treasury uses a monthly average of prices to calculate the Urals price, which means it may be a while before the Russian oil price can be considered over the cap.

The Treasury’s Office of Foreign Assets Control (OFAC) says individuals or companies who evade, avoid, or violate the cap could face civil or criminal enforcement actions, including fines, and that it will work with other countries to share information about evasion.

“We are hell bent on ensuring that evasions are not distorting the market,” a senior U.S. Treasury official said.

‘Policy Pickle’

The administration, however, is set to move slowly, wary of creating ripples in a market that could send rising global oil prices higher.

The administration is in a “policy pickle” because it does not want to come down too hard with enforcement threats and risk boosting global petroleum prices by interfering with the movement of oil, the source with knowledge of administration thinking said.

“They’ll spook the service providers facilitating exports, they certainly don’t want to do that.”

High consumer energy prices are a political risk for President Joe Biden, who is seeking reelection in 2024.

The cap has always had two objectives: reducing Russia’s revenues from oil exports, and ensuring that oil continues to flow to global markets. The administration insists the cap is effective.

Deputy Treasury Secretary Wally Adeyemo has recently spoken with countries with large shipping fleets and shipping trade, while Elizabeth Rosenberg, Treasury’s assistant secretary for terrorist financing and financial crimes, has called protection and indemnity insurance providers, known as P&I clubs, to remind players of requirements related to Russian oil purchases, the administration source said.

Costs To Russia

Another U.S. government source said that the Urals price is high because of recent deals to countries that are outside the cap.

Such sales, mainly to India and China, are expensive for Russia, the source said. Russia has to spend money on a ghost tanker fleet and other expenses to ship oil long distances instead of via pipelines mainly to Europe.

Adeyemo said last month the Russian central bank has guaranteed about $9 billion in a reinsurance scheme intended to replace western reinsurance, due to the price cap, money the Kremlin cannot invest in weapons to fight its war in Ukraine.

The State Department is “closely monitoring all vessels engaged in loading of crude oil and petroleum products from Russia, as well as potential evasion or non-compliance, including the use of deceptive practices to access coalition services for oil traded above the caps,” a spokesperson said.

If Urals prices continue to climb above the cap, Washington could urge fellow G7 countries and the EU to raise the cap, but that would be a diplomatic and political undertaking that faces resistance from Eastern European countries and U.S. lawmakers.

Ben Cahill, an energy security and climate expert at the Center for Strategic and International Studies, agreed enforcement will proceed slowly.

“We could see stronger enforcement on the tanker fleet and the tracking of the ownership of vessels, better quality of attestation of paperwork,” said Cahill. “But there won’t likely be a dramatic change unless oil prices stay high for a while.”

Suzuki was speaking after a meeting in India of the G7 – the U.S., Japan, Germany, Britain, France, Italy and Canada.

The yen weakened as far as 145 per dollar at the end of last month, the level that last fall spurred the finance ministry to intervene in the market to support the currency. However the yen has rebounded strongly this month to around 138 per dollar.

A weak yen can bolster Japanese exporters’ profits but it boosts the price of energy and other imports in yen for businesses and consumers.

Speaking at a press conference, Suzuki also confirmed Japan’s “unwavering support” for Ukraine, Kyodo reported.

Bank of Japan (BOJ) Governor Kazuo Ueda said there was a view that “there is strong uncertainty in the global economy,” the Japanese news agency reported.

Ueda has cited uncertainty about the global economy as a reason for keeping ultra-easy monetary policy in place in Japan, even as inflation runs above the central bank’s target.

The BOJ’s easy monetary policy has been a key driver of the yen’s weakness, as it contrasts with tightening in the United States, Europe and most other developed economies.

Tokyo (Reuters) – Financial leaders from the Group of Seven (G7) advanced countries will hold talks on July 16 on the sidelines of the broader G20 meeting in India, Japanese Finance Minister Shunichi Suzuki said on Friday.

The G7 groups Britain, Canada, France, Germany, Italy, Japan and the United States.

“Support for Ukraine, MDBs (multilateral development banks) reform and international taxation will be discussed at this meeting,” Suzuki added. “We have no plan to issue a statement but we will lead debates to resolve problems the world faces.”

Separately, G20 under the chair India will discuss the global economy and health insurance, sustainable finance and infrastructure, global financial architecture, global tax reform and inclusive finance, he said.

Suzuki welcomed an agreement on Thursday by around 140 members of the OECD/G20 ‘Inclusive Framework on Base Erosion and Profit Shifting (BEPS),’ on a key statement recognising the significant progress towards major global tax reform.

This pact helps “bring stability and certainty to international taxation system. It’s designed to review the principle global tax scheme over the past century and can be historic,” Suzuki said.

Countries with digital services taxes have agreed to hold off applying them for at least another year as a global multinationals tax deal to replace them was pushed back. More than 140 countries were supposed to start implementing next year a 2021 deal overhauling decades-old rules on how governments tax multinationals that are widely considered to be outdated

Eleven countries, including a number in the Caribbean, and Nigeria, have already launched central bank digital currencies (CBDCs) as they are known, while pilot testing in China now reaches 260 million people and covers 200 scenarios from e-commerce to government stimulus payments.

London (Reuters) – A total of 130 countries representing 98% of the global economy are now exploring digital versions of their currencies, with almost half in advanced development, pilot or launch stages, a closely-followed study shows.

The research by the U.S.-based Atlantic Council think tank published on Wednesday said significant progress over the past six months meant that all G20 countries with the exception of Argentina were now in one of those advanced phases.

Eleven countries, including a number in the Caribbean, and Nigeria, have already launched central bank digital currencies (CBDCs) as they are known, while pilot testing in China now reaches 260 million people and covers 200 scenarios from e-commerce to government stimulus payments.

Two other big emerging economies, India and Brazil, also plan to launch digital currencies next year. The European Central Bank is on track to begin its digital euro pilot ahead of a possible launch in 2028, while over 20 other countries will also take significant steps towards pilots this year.

In the United States, though, progress on a digital dollar is only “moving forward” for a wholesale (bank-to-bank) version, the Atlantic Council’s research said, whereas work on a retail version for use by the wider population has “stalled”.

U.S. President Joe Biden ordered government officials to assess the risks and benefits of creating a digital dollar in March 2022.

The heavyweight status of the dollar in the financial system means any U.S. move has potentially enormous global consequences, but the Federal Reserve said back in January that Congress, rather than it, should decide whether a digital version is launched.

The global push for CBDCs comes as physical cash use falls and authorities look to fend off the threat to their money-printing powers from bitcoin and ‘Big Tech’ firms.

Sanctions imposed on the likes of Russia and Venezuela in recent years have been another driver, including even for long-time U.S. allies like Europe, which wants to ensure it has an alternative to the Visa, Mastercard and Swift payment networks.

“Since Russia’s invasion of Ukraine and the G7 sanctions response, wholesale CBDC developments have doubled,” the Atlantic Council said, adding that there were now 12 multi-country “cross-border” projects being worked on.

It said that Sweden remained one of Europe’s most advanced with its CBDC pilot, while the Bank of England is pressing on with work on a possible digital pound that could be in use by the second half of this decade.

Australia, Thailand, South Korea, and Russia all intend to continue pilot testing this year too.

Despite the growing interest in CBDCs, however, some countries that have launched them – such as Nigeria – have seen a disappointing take-up, while Senegal and Ecuador have both cancelled development work.

Leaders of the G7, which includes the United States, European Union and Japan, last week agreed to create an intergovernmental forum called the “Hiroshima AI process” to debate issues around fast-growing AI tools.

G7 government officials will hold the first working-level AI meeting on May 30 and consider issues such as intellectual property protection, disinformation and how the technology should be governed, Japan’s communications minister, Takeaki Matsumoto, said.

The meeting comes as tech regulators worldwide gauge the impact of popular AI services like ChatGPT by Microsoft-backed (MSFT.O) OpenAI.

The EU is coming closer to enact the world’s first major legislation on AI, inspiring other governments to consider what rules should be applied to AI tools.

Japan, as this year’s chair of G7, “will lead the G7 discussion on responsive use of the generative AI technology”, Matsumoto said, adding the forum hoped to come up with suggestions for heads of state by year-end.

At last week’s Hiroshima G7 summit, leaders also called for developing and adopting international technical standards to keep AI “trustworthy” and “in line with our shared democratic values”.

The G7 AI working group will seek input from the Organisation for Economic Co-operation and Development, Matsumoto told a regular press conference.

While an election for parliament’s more powerful lower house is not due until 2025, Kishida is keen to beef up his strength in the ruling Liberal Democratic Party (LDP) ahead of a leadership race next fall, to ensure his re-election and retain the premiership.

His party’s parliamentary majority virtually guarantees its president will be prime minister.

Although Kishida said on Sunday he was not thinking of dissolving parliament now, experts feel he may not be able to resist as favourable conditions stack up.

“He’s going to want to do it at the best timing, to give him good results in the LDP race, to give him a mandate,” said Airo Hino, a professor of political science at Tokyo’s Waseda University.

Holding an election soon would let Kishida benefit from support rates that have shot up 9 percentage points in several polls since the G7 summit began on May 19, as well as perceptions that have strengthened his image as a global leader.

Kishida, who took office in Oct 2021, saw his approval slide to just under 30% in some polls last Nov, battered by revelations of ties between the LDP and the Unification church, but numbers began to edge up with a thaw in ties with South Korea and a trip to Ukraine in March.

Hosting the summit in his home base of Hiroshima, the first city to suffer an atomic bombing in war, also played on sympathy for Ukraine and its suffering.

This received a boost from President Volodymyr Zelinskiy’s unexpected appearance, as well as television images of the two leaders offering flowers at a monument to atomic bomb victims.

“For Kishida, Zelenskiy’s visit has a unique significance that will help boost his support rating,” said Shigenobu Tamura, a political analyst and former LDP staffer.

“In addition, Kishida chaired a summit that raised global issues and included other nations such as India and South Korea, highlighting his actions and stature in the world.”

Kishida may also want to ride tailwinds from multi-decade highs in the benchmark Nikkei 225 index, fuelled by strong earnings and signs of economic revival. On Friday, it powered to its highest since 1990. 

Calling an early election could mean less time for the opposition to prepare.

Few of Japan’s opposition groups pose a significant threat, but the LDP has a wary eye on the growing strength of the conservative Japan Innovation Party and would like to keep it from joining hands with other parties.

Still, Kishida is expected to hold off on an announcement until his government unveils proposals to combat a falling birthrate and passes a measure to increase defence spending. The current parliamentary session ends on June 21.

But there are also significant risks.

An early election might come too soon to guarantee Kishida the LDP presidency even if the party does well, as a threat looms from rising prices, said analyst Atsuo Ito.

While the LDP has won recent elections, including a handful of by-elections this April, their victories have been far from overwhelming, he added, a point also made by other analysts.

“Prime ministers always gain popularity after summits,” Ito added. “The question is whether he can keep it up.”