G7 agrees price cap on Russian oil to rein in runaway energy costs

Finance ministers of the G7 group of leading democracies have agreed a global price cap on Russian oil and petroleum products.

The cap will be implemented by introducing a ban on the provision services such as insurance and finance to any ships carrying Russian-origin crude and related products at above the permitted price.

In a statement, the G7 nations – the US, UK, France, Germany, Italy, Canada, Japan and the EU – said the cap was “specifically designed to reduce Russian revenues and Russia´s ability to fund its war of aggression whilst limiting the impact of Russia´s war on global energy prices”.

Chancellor Nadhim Zahawi, who represented the UK in the virtual meeting, said the move would constrain the ability of Russian president Vladimir Putin to fund the war in Ukraine, as well as allowing the world to protect itself against oil price shocks in 2023.

“This has been a personal priority for me as chancellor,” said Mr Zahawi.

“We will curtail Putin’s capacity to fund his war from oil exports by banning services, such as insurance and the provision of finance, to vessels carrying Russian oil above an agreed price cap.

“We are united against this barbaric aggression and will do all we can to support Ukraine as they fight for sovereignty, democracy and freedom.”

The G7 ministers said that the level of the cap will be set by agreement among the coalition of countries backing the move.

The price cap´s effectiveness and impact will be closely monitored and the price level will be reviewed “as necessary”, they said.