G7 Finance Ministers Convene Emergency Paris Meeting; UBS Warns Oil Stocks Near Record Lows by Month-End

G7 finance ministers convene in Paris on Monday and Tuesday (May 18–19) for an emergency session dominated by two interconnected crises: the prolonged Strait of Hormuz closure and surging long-term borrowing costs across major economies.

UBS warned that global oil stockpiles could approach all-time lows by the end of May if the Strait remains closed. The Strait carries approximately 20% of global seaborne oil trade; military activity linked to Iran has choked exports from Saudi Arabia, Kuwait, and the UAE for multiple weeks. International crude prices have surged more than $20 per barrel over the period, adding a commodity-driven inflationary shock on top of already elevated core inflation across G7 countries.

Eurogroup head Pascal Donohoe stated that opening the Hormuz Strait "is of utmost importance," framing it as a shared G7 economic security priority. CNBC reported that the meeting agenda includes coordinated Strategic Petroleum Reserve releases, potential emergency energy financing mechanisms, and diplomatic messaging on Iran.

The energy shock is amplifying pre-existing bond market stress. The 30-year U.S. Treasury yield has crossed 5.1%, and German Bund yields are at decade highs. The combination of commodity-driven inflation and fiscal pressure from higher interest costs is straining G7 government budgets simultaneously.

Adding a structural complication, the UAE has formally exited OPEC. UAE officials characterized the move as a strategic economic decision rather than a political statement — but the departure weakens OPEC's collective production control at precisely the moment when coordinated output adjustments are most critical.

Watch for: the G7 Paris joint communiqué language on SPR coordination and any signal of direct diplomatic engagement with Iran on Strait reopening.