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G7 investigating energy price caps to curb Russia’s income

G7 members are looking for ways to curb energy costs, including capping oil and gas prices, as a leader in preventing Russia from benefiting from the “war of aggression” against Ukraine and curbing inflationary pressures. increase.

In the communiqué announced today, the G7 will agree to develop a solution to reduce Russia’s hydrocarbon revenues, while minimizing the negative impact of high energy prices, especially for low- and middle-income countries.

According to documents seen by the Financial Times, leaders explore the “feasibility” of introducing temporary price caps on energy imports. Russian oil prices.. G7 officials said earlier that the capital agreed that it was a good idea, but “a lot of work” had to be done to make it happen.

G7 leaders are from Russia War in Ukraine It exacerbated the economic impact of the Covid-19 pandemic, “lowering growth, causing significant rises in commodity, energy and food prices, thereby pushing inflation to levels that have not been seen for decades.”

In their communiqué, leaders agreed to “continue to impose serious and immediate economic costs on President Vladimir Putin’s administration” for “an unjust war of aggression against Ukraine.”

The idea of ​​price caps was motivated by concerns that Russia was benefiting from the rise in energy prices caused by the war in Ukraine, despite the restrictions imposed by G7 members on Russia’s energy imports. increase.

In their communiqué, leaders said, “We are working to ensure that Russia does not use its status as an energy producer to sacrifice vulnerable countries and benefit from its aggression.”

They also expressed concern about rising energy prices and the burden of market instability, warning that “exacerbating domestic and international inequality and threatening our shared prosperity.”

The agreement of EU officials included efforts to find caps on gas prices as well as oil. This reflects the push of Italian Prime Minister Mario Draghi, who has been advocating this idea for months.

The conclusion emphasizes deep vigilance among member leaders about the sacrifices the Ukrainian war has brought to their economies. They are set to agree to have the Minister evaluate the feasibility of price caps as an urgent matter.

The G7 Agreement promises to consider different approaches to oil price caps, including the “possible comprehensive ban on all services” option that enables sea shipping in Russia. Determined in consultation with international partners.

Authorities say the cap could be enforced through Russia’s oil transport, as well as restrictions on the availability of European insurance to transport services and US finance. However, they warn that this plan is very complex and requires intensive technical work. Challenges can be faced in the EU, where sanctions require the consent of all 27 member states.

“We support the basic structure,” said one G7 official on Russia’s oil price cap. “But we need to come up with the details.”

Another said all G7 countries agreed with “the basic idea that Russia’s oil revenues should be reduced.”

Darren Woods, CEO of ExxonMobil, told the Financial Times that trying to fix prices in the oil market would be a “complex task.” “It’s not clear to me how that mechanism works,” he said. “With oil and gas, the market functions very efficiently and effectively.”

Additional report by Tom Wilson in Brussels

G7 investigating energy price caps to curb Russia’s income G7 investigating energy price caps to curb Russia’s income

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