ELMAU, Germany (AP) — Leaders of the world’s wealthiest democracies have taken a united stance in supporting Ukraine “for as long as it takes” as the Russian invasion continues, and said they would explore far-reaching measures to cap Kremlin revenues from oil sales that fund the war.
Tuesday’s final statement from the Group of Seven summit in Germany underscored their intention to impose “serious and immediate economic costs” on Russia. He omitted key details on how fossil fuel price caps would work in practice, holding more talks in the coming weeks to ‘explore’ measures to ban imports of Russian oil above a certain level.
This would hit a key Russian source of revenue and, in theory, help mitigate the energy price spikes and inflation plaguing the global economy in the wake of the war.
“We remain committed to our unprecedented coordination on sanctions for as long as necessary, acting in unison at every step,” the leaders said.
The leaders also agreed to ban imports of Russian gold and step up aid to countries hit by food shortages by the blockade of Ukrainian grain shipments through the Black Sea.
Price caps would theoretically work by preventing service providers such as shippers or insurers from dealing in oil whose price exceeds a fixed level. This could work because the service providers are mostly located in the European Union or the United Kingdom and are therefore within the reach of sanctions. To be effective, however, it would have to involve as many consumer countries as possible, particularly India, where refiners are snapping up cheap Russian oil shunned by Western traders. Details of how the proposal would be implemented have been left for further talks in the coming weeks.
The United States has already blocked imports of Russian oil, which were small anyway. The European Union has decided to impose a ban on the 90% of Russian oil that arrives by sea, but this does not come into force until the end of the year, which means that Europe continues to send money to Russia for energy while condemning the war. Meanwhile, rising global oil prices have softened the blow to Russian revenues, even as Western traders shun Russian oil.
Energy themes were front and center throughout the summit. Europe is scrambling to find new oil sources and gas supplies as Russia cuts gas supplies in what leaders see as a political move. Meanwhile, high energy prices are a headache for consumers in G-7 countries.
Summit host German Chancellor Olaf Scholz defended the G-7’s decision to relax commitments to end public support for fossil fuel investments, saying the war in Ukraine means limited support in time for new natural gas extraction projects might be needed.
The G-7 countries said in a statement at the end of their three-day summit on Tuesday that “in these exceptional circumstances, state-backed investment in the gas sector may be appropriate as a temporary response.”
Before the summit closed, the leaders joined in condemning what they called an “abominable” Russian attack on a shopping center in the town of Kremechuk, calling it a war crime and swearing that President Vladimir Putin and others involved “will be held accountable.”
Leaders of the United States, Germany, France, Italy, United Kingdom, Canada and Japan pledged support for Ukraine on Monday “as long as it takes” after speaking via video link with Ukrainian President Volodymyr Zelenskyy.
The host of the summit, German Chancellor Olaf Scholz, said he “has once again laid out with great emphasis the situation as Ukraine currently sees it”. Zelenskyy’s speech came hours before Ukrainian officials reported a deadly Russian missile strike on a crowded shopping mall in the central city of Kremenchuk.
From the secluded Schloss Elmau hotel in the Bavarian Alps, G-7 leaders will travel to Madrid for a NATO leaders’ summit, where the fallout from Russia’s invasion of Ukraine will once again dominate the order. of the day. All G-7 members other than Japan are NATO members, and Japanese Prime Minister Fumio Kishida has been invited to Madrid.
Zelenskyy is openly concerned that the West is fatigued by the cost of a war that is contributing to soaring energy costs and rising prices of essential goods around the world. The G-7 has sought to allay these concerns.
While the group’s annual gathering was dominated by Ukraine and the ripple effects of war, such as the challenge to food supplies in some parts of the world caused by the disruption of Ukrainian grain exports, Scholz was keen to show that the G-7 can also move forward on pre-war priorities.
Members of the Group of Seven major economies pledged on Tuesday to form a new “climate club” for nations that want to take more ambitious action to tackle global warming.
The move, championed by Scholz, will see countries that join the club agree to tougher measures to cut greenhouse gas emissions in a bid to prevent global temperatures from rising more than 1.5 Celsius (2 .7 Fahrenheit) in this century compared to pre-industrial times.
Countries that are part of the club will try to harmonize their measures so that they are comparable and avoid members imposing climate-related tariffs on each other’s imports.
Speaking at the end of the three-day summit in Elmau, Germany, Scholz said the aim was to “ensure that climate protection is a competitive advantage, not a disadvantage”.
He said details of the planned climate club would be finalized this year.
Follow AP’s coverage of the G-7 summit at https://apnews.com/hub/g-7-summit and Russia’s war in Ukraine at https://apnews.com/hub/russia-ukraine