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The war in Ukraine and its dramatic economic fallout, in particular soaring food and energy inflation, dominated this year’s summit of the group of rich democracies at a castle resort in the Bavarian Alps. An oil price cap would ratchet up existing Western pressure on Russia from sanctions, which German Chancellor Olaf Scholz insisted would stay until Russian President Vladimir Putin accepted failure in Ukraine.
Mr Scholz said at the end of the news conference: “There is only one way out: for Putin to accept that his plans in Ukraine will not succeed.”
The G7 is looking at the price ceiling as a way to prevent Moscow profiting from its invasion of Ukraine, which has sharply raised energy prices, taking the sting out of Western efforts to curb imports of Russian oil and gas.
Russian oil export revenues climbed in May even as volumes fell, the International Energy Agency said in its June monthly report.
The G7 was also exploring the possibility of a gas price cap, a move pushed especially by Italy, G7 officials said. France meanwhile has called for price caps on all energy sales.
The idea behind the cap is to tie financial services, insurance and the shipping of oil cargoes to a price ceiling.
A shipper or an importer could only get these if they committed to a set maximum price for Russian oil.
The G7 leaders said in their communique: “We invite all like-minded countries to consider joining us in our actions.”
However, experts warn the plan could backfire.
READ MORE: Britain’s ‘fattest man’ dies aged 37
Firefighters and soldiers searched on Tuesday for survivors in the rubble of a shopping mall in central Ukraine struck by a Russian missile.
The G7 leaders, who are now headed to Madrid for a summit of the western NATO alliance, condemned the attack as a war crime.
They said: “Putin and those responsible will be held to account.”
G7 leaders urged China in their communique to uphold the principle of peaceful settlement of disputes by pressing Russia to stop its invasion of Ukraine and dropping its “expansive maritime claims” in the South China Sea.
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