G7 leaders meeting in Germany to discuss plans to cut Russia’s oil export earnings amid a surge in energy prices.
Leaders of the Group of Seven (G7) countries have discussed plans to cap the price of Russian oil to pressure Moscow, which is benefiting from rising energy prices and cutting its resources to stop the invasion of Ukraine. Finance.
The United States has proposed a price cap set by consumer countries, a proposal discussed Sunday by G7 leaders at a summit in the Bavarian Alps.
Western nations gathered around Kyiv when Russia invaded Ukraine in February. Still, more than four months into the war, that unity is being tested as rising inflation and energy shortages hit their citizens.
Reprimanded by Ukraine for not going far enough to punish Russia, G7 leaders had “really constructive” talks about a possible price cap for Russian oil, a German government source said, according to the Reuters news agency.
“We are well on the way to reaching an agreement,” the official said.
A French presidential official said Paris would push for an oil and gas price cap and was open to discussing the US proposal.
However, he said the G7 needs to work on getting a maximum oil price and that this will require sourcing oil producers in the Organization of the Petroleum Exporting Countries and its allies in a group called OPEC+, which includes Russia.
“We need to engage in discussions with OPEC+ and producer countries to achieve this,” the official said.
The European Union, which plans to ban imports of most Russian oil from the end of the year, has reservations about the US push for a broad oil price cap or “price exception” to limit Moscow’s energy revenues.
A price exception could operate through a mechanism to limit or prohibit insurance or financing for Russian oil shipments above a certain amount.
It could prevent spillovers to low-income countries with high food and energy costs.
European Council President Charles Michel also said G7 leaders would discuss a technical mechanism that would have the effect of an oil price cap through services related to oil and export insurance.
But Michel said the issue needs to be handled carefully, or things could go wrong.
“We are willing to decide with our partners, but we want to be sure that what we decide will have a negative effect [on Russia] and no negative effect on ourselves.”
Biden Applauds Western Unity
At the start of a bilateral meeting, US President Joe Biden thanked German Chancellor Olaf Scholz for showing leadership over Ukraine and said Russian President Vladimir Putin had failed to break their unity.
Scholz has been criticized at home and abroad for his approach to the Russian invasion of Ukraine.
“We can get through all of this and come out stronger,” Biden said.
“Because, from the start, Putin was counting on NATO and the G7 to shatter somehow. But we haven’t, and we won’t.”
At the beginning of the meeting, four members of the G7 announced plans to ban Russian gold imports as part of efforts to tighten sanctions against Moscow.
The US, UK, Canada, and Japan will ban gold imports from Russia. France also supported the move.
The UK said the ban targeted wealthy Russians who have bought precious metals in safe havens to mitigate the financial impact of Western sanctions. Russian gold exports were worth $15.45 billion last year.
“The measures we announced today will directly affect Russian oligarchs and strike the heart of Putin’s war machine,” British Prime Minister Boris Johnson said.
“We must starve the Putin regime of its funding. The UK and our allies are doing just that.”