The US president apparently mixed the Chancellor up with one of his favourite soul singers, Jeffrey Osborne.
He committed another faux pas by saying Deputy Prime Minister Nick Clegg was better looking than David Cameron.
R&B star Osborne - whose hits include 1980s' tune On the Wings Of Love - also bizarrely suggested that they could sing a duet together.
But posting on Twitter this afternoon, the Chancellor joked that his voice was not up to it.
"One unexpected breakthrough from G8 - offer to sing with legend @_JeffreyOsborne," he wrote. "Jeff you wouldn't suggest a duet if you'd heard me."
The Cabinet minister attended the gathering to brief the leaders of the word's wealthiest countries on plans to crack down on tax dodgers.
But according to The Sun and the Financial Times, he was visibly put out when Mr Obama called him "Jeffrey" three times.
The leader of the free world responded to his 90-minute presentation by saying: "Thanks for that, Jeffrey."
Realising his mistake shortly afterwards, Mr Obama insisted: "I'm sorry, man. I must have confused you with my favourite R&B singer."
Mr Osborne's real name is Gideon, but he changed it to George as a teenager because it was "easier".
Asked about the mix-up on Sky News, Jeffrey Osborne said: "I was really delighted, actually. I was really not aware that he was that much of a fan that he would call the Chancellor Jeffrey Osborne.
"Tell the Chancellor when I come over I will have to hook up with him and we will do a duet of On The Wings Of Love, or something."
The two men are unlikely to have been confused before.
Jeffrey Osborne, from Rhode Island, is the son of a trumpeter and has had countless hit singles and albums in his illustrious career.
By contrast, the Chancellor is the son of Sir Peter Osborne, 17th baronet of Ballintaylor and Ballylemon, and heir to a high-class wallpaper firm.
Mr Clegg confirmed this morning that Mr Obama told him he was the "the better-looking half of the coalition" during the summit.
The "passing comment" was delivered as the Liberal Democrat leader joined a lunch on Tuesday.
Cameron batted off the question of whether Mr Cameron accepted that Mr Clegg was the better-looking half of the coalition.
"I didn't hear those remarks, but what I certainly did hear was all the leaders being wowed by the beauty and impressive nature of the Northern Irish countryside," he said.