ELMAO, Germany (AP) – Leaders of the world’s largest advanced economies said Tuesday they would explore far-reaching steps to reduce Russia’s income from oil sales funding its invasion of Ukraine and took a united stand to support Kyiv “as long as it takes” as the war drags on.
The closing statement of the G7 summit in Germany affirmed their determination to impose “huge and immediate economic costs” on Russia.
It ignored key details about how fossil fuel price ceilings would work in practice, leading to further discussions in the coming weeks to “explore…the feasibility” of measures to keep Russian oil imports above a certain level.
This would hurt a major source of Russian income and, in theory, help mitigate the high energy prices and inflation that hit the global economy as a result of the war.
“We remain steadfast in our commitment to unprecedented coordination on sanctions for as long as necessary, and we act in harmony at every stage,” the leaders said.
G7 leaders – representing the United States, Germany, France, Italy, the United Kingdom, Canada and Japan – pledged on Monday to support Ukraine “for as long as possible” after a videoconferencing with Ukrainian President Volodymyr Zelensky. Zelensky was frankly concerned that the West had grown tired of the cost of war contributing to rising energy costs and soaring commodity prices around the world. The Group of Seven has sought to allay those fears.
The leaders also agreed to ban the import of Russian gold and increase aid to countries suffering from food shortages due to the blockade imposed on Ukrainian grain shipments through the Black Sea.
“We agree that (Russian) President (Vladimir) Putin must not win this war, and we will continue to keep pace and push up the economic and political costs of President Putin and his regime,” said summit host, German Chancellor Olaf Schulz. . “So it’s important that we stand together — including in the long-term that we certainly still face.”
French President Emmanuel Macron said Russia “cannot and should not win” the war in Ukraine – as the toll of heavy casualties came into view the day after a Russian missile strike hit a shopping center in the town of Kremenchug, killing 18 people.
The price cap – pushed by US President Joe Biden – would in theory work by preventing services such as shippers or insurers from handling oil priced above a fixed level. This can work because the service providers are mostly located in the European Union or the United Kingdom and therefore within their reach from sanctions. However, to be effective, it must include as many consuming countries as possible, particularly India, where refineries have been buying cheap Russian oil that Western traders avoid. Details of how the proposal will be implemented are left to continue talks in the coming weeks.
The US has already banned Russian oil imports, which were small anyway. The European Union decided to ban 90% of Russian oil that comes by sea, but the ban does not take effect until the end of the year, which means that Europe continues to send money to Russia for energy even while condemning the war. . Meanwhile, rising global oil prices have softened the blow to Russian income, even as Western traders shun Russian oil.
Energy themes have been front and center at the top the whole time. Europe is scrambling to find new sources of oil and new gas supplies as Russia returns to gas supplies in what leaders say is a political move. Meanwhile, rising energy prices are a headache for consumers in the G7 nations.
Schulz defended the G7’s decision to relax commitments to end public support for fossil fuel investments, saying the war in Ukraine means time-limited support for new natural gas extraction projects may be necessary.
The group has expressed widespread concern about China. The leaders stressed that “it is necessary to cooperate with China on common global challenges” but stressed their position that China should urge Russia to stop war, respect human rights in Hong Kong, refrain from military action against Taiwan, and improve non-transparent trade and economic practices.
From the secluded Schloss Elmau Hotel in the Bavarian Alps, G-7 leaders will travel to Madrid for the NATO Leaders Summit, where the fallout from Russia’s invasion of Ukraine will once again dominate the agenda. All G7 members except Japan are members of NATO, and Japanese Prime Minister Fumio Kishida has been invited to Madrid.
While the group’s annual gathering was dominated by war, Schulze was careful to show that the G7 could also move forward with its pre-war priorities.
Members pledged on Tuesday to create a new “climate club” for countries that want to take more ambitious action to tackle global warming.
The move, which Schulz has endorsed, will see countries joining the club agree to tougher measures to cut greenhouse gas emissions with the goal of keeping global temperatures from rising more than 1.5 degrees Celsius (2.7 Fahrenheit) this century compared to pre-industrial times.
Countries that are part of the club will try to harmonize their measures in such a way that they are comparable and that members avoid imposing climate-related tariffs on each other’s imports.
The goal is to “ensure that climate protection is a competitive advantage, not a disadvantage,” Schulz said.
He said details of the planned climate club would be finalized this year.
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Follow the AP’s coverage of the G7 summit at https://apnews.com/hub/g-7-summit and the Russian war in Ukraine at https://apnews.com/hub/russia-ukraine
