The Group of Seven rich democracies will commit on Tuesday to a new package of coordinated actions meant to raise pressure on Russia over its war in Ukraine, and will finalise plans for a price cap on Russian oil, a senior U.S. official said on Monday.
The announcement came as the White House said Russia had defaulted on its foreign sovereign bonds for the first time in decades – an assertion Moscow rejected – and as Ukrainian President Volodymyr Zelenskiy spoke virtually with G7 leaders meeting at an alpine resort in southern Germany.
Zelenskiy asked leaders of the Group of Seven leading industrial democracies for a broad range of military, economic and diplomatic support, according to a European official.
G7 nations, which generate nearly half the world’s economic output, want to crank up pressure on Russia without stoking already soaring inflation that is causing strains at home and savaging the global south.
The price cap could hit Russian President Vladimir Putin’s war chest while actually lowering energy prices.
“The dual objectives of G7 leaders have been to take direct aim at Putin’s revenues, particularly through energy, but also to minimize the spillovers and the impact on the G7 economies and the rest of the world,” the U.S. official said on the sidelines of the annual G7 summit.
G7 leaders would also make an “unprecedented, long-term security commitment to providing Ukraine with financial, humanitarian, military and diplomatic support as long as it takes”, including the timely provision of advanced weapons, the White House said in a fact sheet.
Western sanctions have hit Russia’s economy hard and the new measures are aimed at further depriving the Kremlin of oil revenues. G7 countries would work with others – including India – to limit the revenues that Putin can continue to generate, the U.S. official said.
India’s Prime Minister Narendra Modi is one of the five leaders of guest nations joining the G7 for talks on climate change, energy, health, food security and gender equality on the second day of the summit.
“Since it is a mechanism that could benefit third countries more than Europe,” one EU official said. “These countries are asking questions about the feasibility, but in principle to pay less for energy is a very popular theme.”
