The ministers said they would enforce the cap by preventing insurance or shipping companies from helping Russia sell oil at prices above the set limit. The decision follows discussions at the group’s summit earlier this year and is aimed at solving one of the vexing problems with sanctions against Russia: Global oil prices have risen on fears of supply cuts, which has only thickened the response of the Kremlin. Meanwhile, soaring energy prices have fueled inflation that is squeezing consumers in rich and poor countries and threatening to push Europe into recession. In a statement issued by Germany, which holds the G7 presidency this year, the ministers said they “reaffirm our shared political intention to finalize and implement a comprehensive ban on services that allow the maritime transport of crude oil and oil products of Russian origin worldwide.” The provision of these services “would only be permitted if oil and petroleum products are purchased at or below a price (‘the price ceiling’) determined by the broad coalition of countries that observe and implement the price ceiling,” it said. the statement. The statement gave no indication of a potential price cap and also did not specify when the G7 intends to finalize the plan. In the statement, the ministers said, “we call on all countries to contribute to the design of the price cap and to implement this important measure,” calling for a “broad coalition to maximize effectiveness.” Former British Chancellor of the Exchequer Rishi Sunak, center back, and US Treasury Secretary Janet Yellen, back right, during a G7 meeting in London in June 2021. The cap is aimed at reducing the revenue of Russia and its ability to finance the war in Ukraine, while also limiting the effects of the war on global energy prices. (Stephan Russo/The Associated Press) White House press secretary Karine Jean-Pierre told reporters at a Friday briefing that in the coming weeks the administration will announce the level of cap prices, coalition partners and guidance for market participants. The G7 consists of the United States, Germany, France, Britain, Italy, Canada and Japan. When they met in June in Germany, G7 leaders agreed to explore a price cap but said the idea needed further discussion, a testament to the complexity of its implementation. The measure — promoted by US President Joe Biden — could work because service providers are mainly based in the European Union or the United Kingdom and are therefore subject to sanctions. To be effective, however, it would have to include as many importing countries as possible, notably India, where refiners have been grabbing cheap Russian oil that Western traders shunned. Russian Deputy Prime Minister Alexander Novak said Russia would refuse to sell oil to countries or companies that adhere to the cap. The US has already blocked imports of Russian oil, which in any case have been small. The European Union has decided to impose a ban on 90 percent of Russian oil coming from the sea, but the ban does not take effect until the end of the year. US Treasury Secretary Janet Yellen said the G7 had taken “a critical step forward” and that “today’s action will help deliver a significant blow to Russian finances and hinder Russia’s ability to fight an unprovoked war in Ukraine and will accelerate the deterioration of the situation. Russian economy.” “We are already beginning to see the impact of the price cap through Russia’s hasty efforts to negotiate bilateral oil deals at huge discounts,” Yellen said in a statement. A senior U.S. Treasury official, speaking on condition of anonymity to discuss strategic thinking, said the caps would create a new price floor for countries such as China and India that are not part of the coalition that buy oil from Russia. Lower prices paid to Russia by those nations would fulfill the coalition’s goal, said the official, who added that Russia is aggressively trying to secure long-term contracts now to limit the loss of potential oil revenue. Friday’s G7 statement said the group is encouraging other oil-producing countries to increase production in order to reduce volatility in energy markets.
