G7 Calls For Price Cap On Russian Oil
By Stefan J. Bos, Chief International Correspondent Worthy News
ELMAU, GERMANY (Worthy News) – Finance ministers of the wealthy Group of Seven (G7) industrialized nations want a price cap on Russian oil to prevent Moscow from profiting from its war against Ukraine.
They spoke Friday in Elmau, Germany, where they gathered at a time of feared energy shortages and price rises in Europe ahead of winter.
It wasn’t clear how undercutting the Kremlin’s finances would help keep the energy flowing to the West, already struggling to meet demand.
Several Western nations, led by U.S. Treasury Secretary Janet L. Yellen, tried to rally the world behind a plan to purchase Russian oil at a lower price.
But major partners of Russia, including Brazil, India, and China, have rushed to buy energy from Russia and were reluctant to condemn Moscow’s invasion of Ukraine.
It showed an emerging geopolitical reality that President Vladimir Putin still has strong allies who can prop up his economy despite Western resistance.
UNDERCUTTING PROFITS?
Yet G7 ministers said they would continue settling on a price cap intended to undercut those multi-billion dollar profits while ensuring Russia continues to provide oil to world markets.
The G7, composed of the U.S. and other Western allies, said they plan to enact the price cap by cutting off insurance for all shipments of Russian oil sold above a specific price.
That would effectively make it impossible to ship, but it wasn’t clear how Moscow would react to these threats. The new price cap, which wasn’t published yet, was due to go into effect by the end of the year.
“We will curtail Putin’s capacity to fund his war from oil exports by banning services … to vessels carrying Russian oil above an agreed price cap,” stresses Nadhim Zahawi, chancellor of the exchequer in Britain.
The statement was seen as a critical signal that the West is pushing aggressively to translate the price cap into reality after months of debates over whether European governments would back the policy.
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