G7 nations talk of implementing Russian oil price cap ‘urgently’

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G7 nations on Friday (September 2) vowed to “urgently” implement a price cap on Russian oil imports with a view to cut a major source or Russian revenue in light of Ukraine war.

The countries said that they were working towards a “broad coalition” of support for the measure. However, officials in France have urged caution. They say a “final” decision could only be taken after assent from all 27 member countries of the European Union (EU).

Rising energy prices have had a huge impact on household expenses in Europe. Russia has also leveraged its position as a major gas supplier to Europe to exert political pressure on the continent.

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“Russia is benefitting economically from the uncertainty on energy markets caused by the war and is making big profits from the export of oil and we want to counter that decisively,” German Finance Minister Christian Lindner said in a press conference after the move was announced.

The aim of the price cap on oil exports was to “stop an important source of financing for the war of aggression and contain the rise in global energy prices”, he added.

Kremlin sounded a warning ahead of Friday’s decision. Spokesperson Dmitry Peskov said that The adoption of a price cap “will lead to a significant destabilisation of the oil markets.”

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Moscow would “simply not supply oil and petroleum products to companies or states that impose restrictions,” Russia’s Deputy Prime Minister Alexander Novak had warned on Thursday, according to Russian news agencies.

(With inputs from agencies)

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