G7 leaders decided on Tuesday to investigate imposing price limitations on Russian oil and gas imports in order to limit Moscow’s ability to support its invasion of Ukraine.
According to a piece of the final G7 declaration obtained by Reuters, the European Union would discuss with foreign partners options to reduce energy costs, including the potential of imposing temporary import price ceilings. Officials said that this included both oil and gas.
The Group of Seven affluent countries has been considering a worldwide price ceiling for Russian energy in order to prevent Moscow from benefitting from its invasion of Ukraine, which has caused oil and gas prices to skyrocket.
Russian oil export income increased in May, despite sanctions reducing export quantities, according to the International Energy Agency’s June monthly report.
The US was the first to advocate for a system to control the price other nations pay for Russian oil.
The plan aims to link financial services, insurance, and oil cargo transportation to a ceiling on Russian oil prices. If a shipper or importer desired these services, they would have to agree to Russian oil being sold at a certain maximum price.
Italy, whose economy is heavily dependent on Russian energy, lobbied for the price ceiling to be extended to gas.
Last week, Italian Prime Minister Mario Draghi spoke of the need to address energy costs in order to manage inflation, and claimed the primary argument to a gas cap from fellow Europeans was concern that it would lead Russia to decrease supply even more.
France has said that the price limit mechanism should be extended beyond Russian goods in order to decrease costs more generally, particularly for G7 countries seeking alternative energy sources.