Evian may come to be remembered as the summit where Donald Trump ceased to be an outsider and instead became the central figure around whom a new consensus emerged.
Previous G7 meetings had been marked by disagreements over tariffs, Ukraine and the Middle East and had often led to limited agreement. However, in this instance, Trump’s Iran agreement earlier in the week seemed to set the tone for a more civil and constructive atmosphere.
Similarly, President Macron spoke of an “Evian moment”, suggesting a revolutionary nature of the revitalised G7.
The unity displayed in Evian was not merely political. Markets reward predictability, and investors had feared that a prolonged Middle Eastern conflict would unleash a new energy shock. Concerns over shipping routes, inflation and energy supplies pushed leaders towards cooperation as much as diplomatic considerations.
The Iran Deal and the Economics of Stability
The greatest achievement of the summit was not military but economic: preventing another energy shock. The announcement of a possible peace agreement between Washington and Tehran, signed on 18 June, immediately reassured international markets. With the agreement in place, Trump announced that the Strait of Hormuz would be reopened and secured to guarantee the safe transit of maritime traffic.
Although the peace deal has been signed, negotiations that were supposed to take place this weekend, in Switzerland, between the US and Iran, have been indefintely postponed. It is at prensent unclear what signficance this might have on the move towards peace, although at the moment the lull in the conflict seems to be holding.
There are three key areas that stand to benefit economically from this prospect of restored peace. The first and most immediate beneficiary would be the energy sector. Nearly one-fifth of global oil supplies transit through the Strait of Hormuz, and fears of disruption during the conflict had pushed crude prices sharply higher. For Europe, already weakened by successive energy crises, any additional shock would have risked reigniting inflation and slowing economic growth.
The peace agreement has already had a visible impact on commodity markets, with Brent crude falling from more than 87 dollars per barrel on 10 June to 75.85 dollars on 18 June, a decline of almost 14 per cent. Lower energy prices, while requiring time to filter through to households and businesses, should help central banks continue the gradual easing of monetary policy and reduce pressure on consumers.
A second beneficiary is international trade. With maritime routes secured and the risk of disruptions diminished, insurance premiums and shipping costs are expected to decline. Such reductions should eventually feed through into lower prices for imported goods, easing pressures on global supply chains.
Finally, the wider global economy stands to gain from a reduction in geopolitical uncertainty. By removing the threat of another major energy shock, governments and investors alike can focus on growth rather than crisis management. Ultimately, behind the triumphant rhetoric, the real dividend of the Iranian agreement lies in having avoided a new inflationary shock that none of the world’s major economies could afford.
Ukraine and Trump’s Hint that “Something Big Is Going to Happen”
The final hours of the summit shifted attention from the Middle East to Ukraine, where Trump suggested that another diplomatic breakthrough might be approaching. This G7 meeting, differently from past meetings which had been divided on the theme of Ukraine, showed the major leaders united on the question of the war on Europe’s doorstep.
Following a telephone conversation had with Russian president Vladimir Putin, President Trump made the cryptic announcement that something big is going to happen . With both Kiev and Moscow showing signs of fatigue, and with renewed discussions over possible negotiating frameworks emerging in diplomatic circles, Trump’s remarks added to speculation that a fresh attempt at mediation between Russia and Ukraine could be underway.
However, beyond the geopolitical intrigue surrounding Trump’s remarks, the prospect of a diplomatic opening carries significant economic implications. For Europe, a reduction in hostilities would translate not only into greater security but also into lower defence costs after years of rapidly expanding military expenditure. More importantly, the prospect of peace would strengthen investor confidence and reduce the volatility that has strongly affected energy and commodity markets since 2022.
For Russia, any meaningful progress towards a settlement would raise the possibility, while gradual and conditional, of sanctions relief and a partial reconnection with global financial and commercial networks. Even without a complete normalisation of relations, the mere expectation of a more stable geopolitical environment could encourage investment and ease pressure on key sectors of the Russian economy.
The wider world economy would stand to benefit as well. A reduction in geopolitical risk would lower uncertainty premiums embedded in commodity prices, contribute to greater stability in food and energy markets and provide a more favourable environment for growth.
A prospect of greater stability
Whether Trump’s prediction that “something big is going to happen” ultimately heralds a breakthrough in Ukraine remains uncertain. What emerged from Evian was a shared recognition that peace is no longer merely a moral aspiration or a strategic objective, but an economic necessity.
From Tehran to Kiev, the world’s leading economies appear increasingly aware that stability itself has become a scarce commodity. If the first half of the decade was defined by the economics of conflict, Evian may come to symbolise the beginning of an era shaped by the economics of peace.
