The Group of Seven (G7) industrialized nations vowed to “urgently” move forward on implementation of a price cap on Russian oil imports as part of its "united" response to Moscow’s brutal invasion of neighboring Ukraine.
The G7 on September 2 said the long-discussed move would be aimed at depriving Russia of revenue needed to conduct its military operations and to help lower energy prices on world markets.
Following a summit in Elmau, Germany, G7 leaders “reaffirmed a shared commitment” to implement measures that would punish Moscow for its “brutal, unprovoked, unjustifiable, and illegal war of aggression against Ukraine."
G7 members said agreed provisions would allow maritime transportation of Russian-origin crude oil and petroleum products only if supplies are purchased at or below a price to be “determined by the broad coalition of countries adhering to and implementing the price cap.”
Global service providers would only be permitted to do business related to Russian seaborne oil and petroleum products if the supplies were sold at or below the price cap.
The G7 -- which consists of the United States, Canada, France, Germany, Britain, Italy, and Japan -- said it would work to finalize measures within its own jurisdictions, but it did not give a time frame.
For such a price cap to have a significant impact, it would also need to be implemented by the European Union, which requires unanimity among its 27 members, some of which are reluctant to endanger domestic energy supplies with winter approaching.
Ukrainian President Volodymyr Zelenskiy in his evening address on September 2 welcomed the G7's plans to set restrictions for the purchase of Russian oil.
“I constantly remind everyone that the protection of Ukraine is the protection of the whole of Europe,” he said. “Not only ours -- of the entire democratic world.”
“It is from this point of view that it is worth considering the decision agreed today by the countries of the G7 to limit the price of Russian oil. When this mechanism is implemented, it will become an important element in protecting civilized countries and energy markets from Russian hybrid aggression," Zelenskiy said.
Disruptions in energy supplies from Russia have caused prices to surge worldwide, causing particular hardship for poorer countries but also hitting the economies of the industrialized world.
The G7 said a price cap would limit the impact of Russia’s “war on global energy prices, particularly for low- and middle-income countries."
U.S. President Joe Biden has been outspoken in his call for a price cap on Russian energy products.
On September 2, U.S. Treasury Secretary Janet Yellen said a price cap on Russian oil would serve Washington’s "dual goals” of fighting inflation and striking a blow against Russian President Vladimir Putin’s ability to finance his “brutal” war in Ukraine.
The G7 statement came after former Russian President Dmitry Medvedev warned the EU that Moscow could halt the flow of natural gas to the bloc if it introduces a price cap on Russian supplies, as urged by European Commission chief Ursula von der Leyen.
Von der Leyen on September 2 called for a price cap on Russian pipeline gas to prevent Moscow from manipulating the EU's energy market in retaliation for sanctions sparked by the Kremlin's invasion of Ukraine.
Medvedev, who has taken a hard line against countries that have slapped sanctions on Russia over the invasion, said a cap would trigger a response and "there will simply be no Russian gas in Europe.”
The statements come as Russia on September 2 scrapped a deadline to resume gas flows through the Nord Stream 1 pipeline to Germany after saying it had discovered a fault in the pipeline during maintenance, further heightening fears in Europe as the winter approaches.
Russian state-controlled Gazprom said without giving a time frame that it could not safely restart deliveries until it had fixed an oil leak found in a pipeline turbine. Gazprom originally had said the pipeline, after a three-day pause for maintenance, would resume operations early on September 2.