G7 leaders want price cap on Russian oil

The leaders warned that the war was "pushing up inflation to levels not seen for decades".

They said they would explore the "feasibility" of introducing temporary price caps on energy imports, a US-pushed policy.

"It will need a lot of work," German chancellor Olaf Scholz said after the meeting at a press conference.

The idea is that a transporter or an importer could only get insurance or financing if they committed to a set maximum price for Russian oil.

"We will continue to drive up the economic and political costs for president [Vladimir] Putin and his regime, and keep them high," he added.

"We will explore further measures to prevent Russia from profiting from its war of aggression," the final communique of the G7 meeting said.

The aim of the oil-price cap is to ramp up pressure on Moscow (which on Monday defaulted on foreign debt for the first time in a century) by linking insurance and the shipping of oil to a price ceiling.

The leaders said that they will consider "options for a possible comprehensive prohibition of all services, which enable transportation for Russian seaborne crude oil and petroleum products globally, unless the oil is purchased at or below a price to be agreed in consultation with international partners."

They also invited "likeminded" countries to join.

With benchmark Brent prices at $110-$120 (€104-€114) per barrel, Russian oil sells at heavy discounts of $30-$40 (€28-€38) per barrel and Chinese and Indian buyers are snapping it up, Reuters reported.

"Some producers and speculators are making a lot of money with the current war," French president Emmanuel Macron said after the summit.

"Russia is trying to destabilise international order" by using the world's reliance on food and energy, Macron said, adding that "Russia cannot and must not win this war."

Russian oil-export revenues increased in May even as volumes fell, the International Energy Agency said in its report, according to Reuters.

The G7 is also exploring the possibility of a gas price cap, a move pushed especially by Italy. France, for its part, called for price caps on all energy sales.

Global hunger

However, some experts warned that the plan could backfire if, for instance, Putin decides to reduce energy exports to increase prices.

The plan could also face hurdles because it needs the support of non-G7 countries, while in the EU any sanction requires the backing of all 27 member states.

The G7 leaders also discussed food security as the war in Ukraine worsened an already looming crisis in supply chains and food production caused by the climate crisis, and the pandemic.

The leaders pledged €4.28bn to fight global hunger.

Meanwhile in Ukraine, soldiers searched for survivors in the rubble of a shopping mall in central Ukraine struck by a Russian missile on Monday.

The G7 leaders now head to Madrid for the historic Nato summit, where the alliance is expected to ramp up defence plans to protect its eastern European flank.