- The G7 summit in Canada coincides with the conflict, and it may have an overshadowing impact on the original agenda of the meeting.
- The G7 summit was initially expected to focus on issues of economic recovery, AI regulation, and climate change.
- These recent developments in the Middle East would also test the capabilities of the G7 in handling real-time geopolitical conflicts and how well they can maintain global peace.”
Amid the recent escalatory attacks between Israel and Iran, both countries are launching missile and drone attacks on each other. This poses a big risk for countries in the Middle East if this blows up into a full-scale war. The risk of global spillover in the region is higher because of the history of proxy wars between these nations. The risk of regional spillover is also higher because of the involvement of Hezbollah, Houthis, and Iraqi militias. The global markets are at risk, too, because of the threat to oil markets. This war, again, like any other, divides the world into 2 global alliances- the U.S., Israel, and allies vs. the China–Russia–Iran axis.
Meanwhile, the G7 summit in Canada coincides with the conflict, and it may have an overshadowing impact on the original agenda of the meeting. Mostly, all the G7 members have condemned the attack and asked both parties for de-escalation measures and respect for international law. U.S. supports the right of Israel to defend; however, it urges restraint. Germany and France call for a diplomatic dialogue. India, which is not a member of the G7, but attends the summit as a guest, emphasises peace and non-alignment. For India, there are also humanitarian concerns, including the evacuation of Indian nationals from both Iran and Israel.
Israel carried out multiple airstrikes inside Iran, in a pre-emptive measure to stop it from expanding its nuclear facilities, as this would pose a direct risk to Israel’s safety. The main targets were IRGC military bases and command centres. Many of the top Iranian commanders were reportedly killed in the strike. The strike aimed to weaken Iran’s military and its economy. Oil depots in Iran were targets too. Iran, in retaliation, attacked several of the Israeli military sites by deploying drones and firing missiles. It also targeted Iran’s nuclear facilities at Dimona. Iran aims to demonstrate its military strength and deterrence through this series of attacks.
From a global perspective, there is a high chance of this war spilling over into the region, involving groups like Hezbollah and Houthis. For the global economy, this potential escalation may trigger oil prices, especially via the Strait of Hormuz. This could trigger disturbance in the global energy markets. The conflict raises the demand for multilateral diplomacy through the United Nations or certain neutral states. Many nations, including India, have started the evacuation of their nationals from the conflict zones of Israel and Iran. This again poses a testing time for the global powers to showcase their ability to maintain peace.
The G7 summit was initially expected to focus on issues of economic recovery, AI regulation, and climate change. The recent escalations between Iran and Israel have suddenly shifted the agenda to more pressing issues like restoring peace, global security, and crisis management. G7 countries, being the most advanced countries in the world, are facing the pressure of showcasing a united front on the crisis. The concerns over the possibility of global oil market volatility and regional instability would dominate the discussions now. These recent developments in the Middle East would also test the capabilities of the G7 in handling real-time geopolitical conflicts and how well they can maintain global peace.
References:
- https://www.theguardian.com/world/2025/jun/15/israel-hits-iran-energy-defence-ministry-
conflict-escalates - https://www.bbc.com/news/articles/cpvk9rj73zdo
- https://www.aljazeera.com/economy/2025/6/14/iran-israel-tensions-and-an-unpredictable-trump-to-dominate-g7
- https://economictimes.indiatimes.com/markets/expert-view/how-will-escalating-israel-iran-conflict-zooming-oil-price-impact-global-inflation-anurag-singh-answers/articleshow/121875504.cms?from=mdr
- https://www.icis.com/asian-chemical-connections/2025/06/three-scenarios-for-the-israel-iran-crisis-and-the-impact-on-the-global-economy/
Archita Gaur is a postgraduate student at the School of International Studies, JNU. She specialises in the World Economy and has a strong interest in public policy, economic research, and governance. The views expressed are the author’s own.
Sughosh Joshi 
Rajeev KS 
Parag Gilada