ELMAU, Germany — Group of Seven nations are moving closer to capping the price that countries can pay for Russian oil, a senior U.S. official said.
The official said leaders aim to further restrict Vladimir Putin’s cash flow, bring down prices at the gas pump and provide greater stability to energy markets.
Leaders were said to be zeroing in on the way Russian oil is shipped. The U.S. official said G-7 leaders are planning to direct their governments to take urgent steps to design a price cap mechanism for countries that do not participate in the economic alliance.
Jake Sullivan, Biden’s national security adviser, told reporters that an agreement on price caps would mark “pretty dramatic step forward,” adding that it would amount to “one of the more significant outcomes of G-7 summit.”
No additional details on a potential price cap and how it would work were immediately available. Sullivan said the delay of the agreement had to do with the novelty and complexity of the approach.
“It is a new kind of concept to deal with a particularly novel challenge, which is how to effectively deal with a country that’s selling millions of barrels of oil a day and try to deprive it of some of the revenues that they’re getting from the sale of that oil,” Sullivan said.
G-7 leaders will spend the second day of a Bavarian summit talking about a leader who was once a part of their exclusive economic club: Vladimir Putin.
In 2014, G-7 nations banished Russia from their gathering over its first invasion of eastern Ukraine. Now, with Putin’s army pummeling the country, world leaders are rushing to stop him.
Leaders will work over lunch (again) — this time discussing climate, energy and health initiatives. Later in the day, they will sit down with guest nations. This host of this year’s summit, Germany’s Scholz, invited the leaders of Argentina, India, Indonesia, Senegal and South Africa to attend.
Italy, France, Germany, the United States, the United Kingdom, Canada and Japan regularly form the G-7, which gets its name from the number of permanent participants. When Russia was part of the organization, it was known as the G-8.
The U.S. also announced on Monday that it would impose sanctions that would make it harder for Russia to replace its military equipment. The official said that the U.S. Treasury Department will introduce blocking sanctions on private military companies operating in Ukraine and Russian officials trying to exert authority in contested areas.
G-7 leaders have also agreed on a new way to fund the Ukrainian war effort, according to the White House. A fact sheet on the new measures says nations will seek to use funds generated by new tariffs on Russia to help Ukraine. As part of the announcement, the U.S. says it will raise tariffs on roughly $2.3 billion of Russian goods.
Russia is on the verge of defaulting on its debt for the first time in more than a century, with access to its foreign currency reserves halted. The country is also experiencing inflation above 17%.
But consumers in the U.S. and other G-7 nations are also facing higher costs. Fuel prices in the United States have decreased in the past several days, yet a gallon of gas still costs $0.30 more than it did a month ago.
Biden administration officials have stressed at every turn that Putin’s unprovoked war on Ukraine is primarily causing inflation.
But with no end in sight to the military conflict, Biden is asking his administration and oil and gas companies to come up with creative ways to drive down prices for American consumers.
Biden and G-7 leaders announced a ban on new imports of Russian gold on the first day of their summit. They also launched a global infrastructure initiative.
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