G7 Leaders Make Progress in Discussions to Cap Russian Oil Ahead of G7 Summit

G7 Leaders Make Progress in Discussions to Cap Russian Oil Ahead of G7 Summit

A German government official said that just before the start of the annual three-day G7 summit on Saturday, the leaders of the Group of Seven rich democracies had “very constructive” discussions about possible limits on Russian oil imports, Reuters reported.

G7 discussions are focused on ways to further escalate pressure on the Kremlin over its invasion of Ukraine without fueling global inflationary pressures.

It is expected that the Ukraine war, energy and food shortages, and the dimming economic outlook will dominate the agenda of the summit taking place this year in Schloss Elmau, a castle resort in southern Germany.

As part of sanctions against the Kremlin over its invasion of Ukraine, the United States, Canada, and the United Kingdom have already barred the import of Russian oil, and the European Union has approved an embargo that will take full effect by the end of 2022.

Despite the rise in energy prices, the West fears that such embargoes will not hurt Russia’s finances since the country earns more from exports even as volumes fall.

According to officials, a price cap could solve that dilemma without further limiting oil supply and fueling inflation, but in order to work, heavy importers like India and China need to be on board. The official added that he believes that they are on the right path to reaching an agreement.

Adding that the G7 was also discussing the need for some countries to invest in new gas fields as Europe seeks to wean itself off Russian gas imports.

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