G7 leaders conclude their conference by vowing harsher measu...| MENAFN.COM

Friday, 12 August 2022 08:12 GMT

G7 leaders conclude their conference by vowing harsher measures against Russia


(MENAFN) During a conference in Germany, the leaders of the world's richest democracies agreed to isolate Russia while pledging to back Ukraine for "as long as it takes" against Moscow's invasion.

Canada, France, Germany, Japan, Italy, the United Kingdom, and the United States, along with the European Union, emphasized their intent to impose "severe and immediate economic costs" on Russia and take a glance into far-reaching stages to cap Kremlin revenue from oil sales that are financing the war, which is now in its fifth month, in their final statement from the Group of Seven (G7) summit on Tuesday.

The statement lacked vital specifics on how the fossil fuel price limitations would function in practice, leaving the stage for additional talks in the coming weeks to "explore" steps to restrict Russian oil imports over a particular threshold. This would harm a significant Russian source of income and, in principle, help alleviate the global economy's energy price hikes and inflation caused by the conflict.

“We remain steadfast in our commitment to our unprecedented coordination on sanctions for as long as necessary, acting in unison at every stage,” the leaders stated.

In principle, the price ceiling would function by prohibiting service providers such as shippers and insurers from interacting with oil priced over a certain threshold. That may work since most service providers are based in the EU or the UK, and therefore are subject to penalties.

However, for it to be effective, it would need to engage as many consuming countries as possible, particularly India, where refiners have been picking up cheap Russian oil rejected by Western dealers.

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