Russia earns billions from oil exports. At the same time, consumers in the USA and Europe have to accept sharp jumps in the price of petrol and heating oil. The G7 countries are contemplating a delicate intervention in the market.
According to information from the German Press Agency, Germany and the other G7 countries want to examine mechanisms for a price cap for Russian oil. The ministers responsible should be instructed accordingly, several diplomats confirmed shortly before the conclusion of the G7 summit in Elmau, Bavaria.
Possibilities for price caps for gas are also to be examined. The plans that have already been made envisage forcing Russia to sell oil to large buyers such as India at a significantly lower price in the future. This could work by the West tying services such as insurance for oil shipments to compliance with the price cap.
On the one hand, the upper limit is intended to ensure that Russia no longer benefits from price increases on the energy market. On the other hand, it should contribute to a relaxation on the oil markets worldwide. Not only in the EU, but also in the USA, the high fuel prices are currently a big issue.
The heads of state and government of the G7 discussed the proposal intensively at the summit in Schloss Elmau.
EU Council President Charles Michel had said that, among other things, a clear idea of the direct effects and possible side effects of the planned price limit mechanism was needed. Accordingly, it should be clear that this really affects Russia and not only ensures that the situation for the EU becomes even more difficult and complex.
G7 wants to stick to climate goals despite the energy crisis
Meanwhile, the heads of state and government want to stick to the current climate protection goals despite the energy crisis triggered by the Ukraine war.
According to information from the German Press Agency, the members will make it clear in the final declaration of the G7 summit meeting in Elmau, Bavaria, that they continue to see the so-called Paris Agreement as a guideline for their actions. In December 2015, the countries of the world agreed to make efforts to limit global warming to 1.5 degrees if possible.
The final declaration for the G7 meeting should now read: “While we take immediate measures to secure energy supplies and halt the rise in energy prices due to exceptional market conditions, we will not meet our climate and biodiversity goals – including the energy transition – nor ours Commitments to end our dependence on Russian energy are in jeopardy.”
Climate protectors fear that because of the planned farewell to Russian gas, the phase-out of coal-fired power generation, which is comparatively harmful to the climate, could be delayed. The federal government has already announced that it will start up coal-fired power plants again in order to save natural gas.