Russia-Ukraine crisis World

G7 to cap Russia’s income from oil sales

(From centre anti-clockwise) U.S. President Joe Biden, German Chancellor Olaf Scholz, Canadian Prime Minister Justin Trudeau, Italian Prime Minister Mario Draghi, European Council President Charles Michel, President of the European Commission Ursula von der Leyen, Japanese Prime Minister Fumio Kishida and British Prime Minister Boris Johnson, during the G7 summit on June 28, 2022.

(From centre anti-clockwise) U.S. President Joe Biden, German Chancellor Olaf Scholz, Canadian Prime Minister Justin Trudeau, Italian Prime Minister Mario Draghi, European Council President Charles Michel, President of the European Commission Ursula von der Leyen, Japanese Prime Minister Fumio Kishida and British Prime Minister Boris Johnson, during the G7 summit on June 28, 2022. | Photo Credit: AFP

Leaders of the world’s wealthiest democracies struck a united stance to support Ukraine for “as long as it takes” as Russia’s invasion grinds on, and said they would explore far-reaching steps to cap Kremlin income from oil sales that are financing the war.

The final statement on Tuesday from the Group of Seven (G7) summit in Germany underlined their intent to impose “severe and immediate economic costs” on Russia. It left out key details on how the fossil fuel price caps would work in practice, setting up more discussion in the weeks ahead to “explore” measures to bar imports of Russian oil above a certain level.

“We remain steadfast in our commitment to our unprecedented coordination on sanctions for as long as necessary, acting in unison at every stage," the leaders said.

The leaders also agreed on a ban on imports of Russian gold and to step up aid to countries hit with food shortages by the blockade on Ukraine grain shipments through the Black Sea.

The price cap would in theory work by barring service provides such as shippers or insurers from dealing with oil priced above a fixed level. The service providers are mostly located in the European Union or the U.K. and thus within reach of sanctions. To be effective, however, it would have to involve as many consuming countries as possible, in particular India, where refiners have been snapping up cheap Russian oil shunned by Western traders.

The U.S. has already blocked Russian oil imports, which were small in any case. The EU has decided to impose a ban on the 90% of Russian oil that comes by sea, but that does not take effect until the end of the year, meaning Europe continues to send money to Russia for energy even while condemning the war. Meanwhile, higher global oil prices have softened the blow to Russia's income, even as Western traders shun Russian oil.

Attack on mall

Before the summit's close, leaders joined in condemning what they called the “abominable” Russian attack on a shopping mall in the town of Kremechuk, calling it a war crime and vowing that President Vladimir Putin and others involved “will be held to account.”

The leaders of the U.S., Germany, France, Italy, the U.K., Canada and Japan on Monday pledged to support Ukraine “for as long as it takes” after conferring by video link with Ukrainian President Volodymyr Zelensky.

Members of the Group also pledged to create a new ‘climate club’ for nations that want to take more ambitious action to tackle global warming.

The move will see countries that join the club agree on tougher measures to reduce greenhouse gas emissions with the aim of keeping global temperatures from rising more than 1.5 Celsius (2.7 Fahrenheit) this century compared with pre-industrial times.


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Printable version | Aug 10, 2022 5:44:53 pm | https://www.thehindu.com/news/international/g7-to-back-ukraine-for-as-long-as-it-takes/article65575768.ece