G7 leaders 'finalising global price cap for Russian oil' to starve Kremlin of cash

They want to take aim at President Putin's 'revenues for war', a US official said

G7 leaders gather for their annual summit at Elmau Castle in Bavaria, Germany, on Monday. EPA.

G7 leaders will commit to a package of co-ordinated measures aimed at exerting more pressure on Russia and finalise plans for a global price cap on Russian oil, a senior US official has said.

The heads of the Group of Seven rich democracies are in Germany for their annual summit, which is dominated by the question of a unified respond to Russia’s war in Ukraine.

The aim of the group is to starve Russian President Vladimir Putin's government of the main source of financing for its war, which comes from oil, a US official told reporters on the sidelines of the summit at Elmau Castle in Kruen, Bavaria.

“We're still in final discussions with other G7 counterparts working to finalise this, but we're very close to a place where G7 leaders will have decided to urgently direct relevant ministers to develop mechanisms to set a global price cap for Russian oil,” the official told reporters.

The goal of the plan is to starve the Kremlin of its “main source of cash and force down the price of Russian oil”.

“The dual objectives of G7 leaders have been to take direct aim at Putin's revenue, particularly through energy, but also to minimise the spillovers and the impact on the G7 economies and the rest of the world,” the official said.

As the invasion of Ukraine enters its fifth month, western nations are ready to increase the pressure on Russia without pushing up already high inflation that is causing pain, particularly for the global south.

The price cap proposed by the G7 is intended to throw a spanner into the Kremlin’s works while lowering energy prices.

G7 leaders will also make an “unprecedented, long-term security commitment to providing Ukraine with financial, humanitarian, military and diplomatic support as long as it takes,” a White House fact sheet said. This includes the timely provision of advanced weapons.

Britain’s Prime Minister Boris Johnson praised the unity of western leaders on responding to Russia’s war in Ukraine.

“What’s really struck me in the last few days had been the amazing consistency of our resolve, the continuing unity of the G7 that has absolutely, absolutely shone through in the conversation over the last couple of days,” Mr Johnson told BBC News at the summit.

He stressed the importance of the G7 offering support to help the Ukrainians rebuild their economy, export grain and be in a position to protect themselves.

“And that’s what we’re going to continue to do,” he said.

The prime minister said the situation in the eastern and southern regions of Ukraine remains difficult “but the Ukrainians have shown that they have incredible ability to push back and change the military position”.

During a round-table discussion at the summit on Sunday, G7 leaders poked fun at President Putin’s macho image.

As they sat down for their first meeting in the Bavarian Alps, Mr Johnson asked if their jackets should come off — or even if he should be bare-chested.

“We all have to show that we're tougher than Putin,” Mr Johnson said, to laughter from some of his colleagues.

Mr Putin has in the past been pictured shirtless while hunting on horseback.