Will the new Middle East crisis rock the world economy? The markets say no – but I fear they’re wrong | Larry Elliott

The oil shocks of the 1970s-90s had brutal economic impacts. As Israel attacks Iran, a moderate rise in oil prices rests on questionable assumptionsFinancial markets picked up the clear message when Donald Trump cut short his stay at the G7 summit in the Canadian Rockies this week. Despite calls from fellow western leaders to de-escalate the crisis, the president’s early return to the White House was taken as a sign that the US is considering joining Israel in its military action against Iran. Trump says he wants Iran’s unconditional surrender.This is where modern summitry came in half a century ago. In 1975, the first meeting of what eventually became the G7 was convened at Rambouillet in France in an attempt to work out a joint response to the oil shock that accompanied the Yom Kippur war between Israel and its neighbours.Larry Elliott is a Guardian columnistDo you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

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