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G7 To Increase Penalties On Russia, Is Close To Reaching An Agreement On Oil Price Ceiling

G7 To Increase Penalties On Russia, Is Close To Reaching An Agreement On Oil Price Ceiling
A senior US official said on Monday that the Group of Seven rich democracies will commit to a new package of coordinated actions on Tuesday to put pressure on Russia over its war in Ukraine, as well as finalise plans for a price restriction on Russian oil.
The revelation occurred as the White House claimed that Russia had defaulted on its foreign sovereign debts for the first time in decades, which Moscow denied, and as Ukrainian President Volodymyr Zelenskiy spoke electronically with G7 leaders meeting in a southern German alpine resort.
According to a European official, Zelenskiy requested military, economic, and political assistance from the Group of Seven leading industrial democracies.
The G7 countries, which account for roughly half of global economic activity, want to increase pressure on Russia without exacerbating already-rising inflation, which is causing problems at home and ravaging the global south.
The price cap may have an impact on Russian President Vladimir Putin's war chest while actually cutting 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.
According to the White House, G7 leaders will also announce a "extraordinary, long-term security commitment to provide Ukraine with financial, humanitarian, military, and diplomatic support for as long as it takes," including the prompt transfer of modern weapons.
Western sanctions have had a significant impact on Russia's economy, and the additional restrictions aim to further deprive the Kremlin of oil earnings. According to the US official, the G7 countries would collaborate with others, notably India, to limit the amount of money Putin might continue to earn.
On the second day of the summit, India's Prime Minister Narendra Modi is one of five leaders of guest nations joining the G7 for discussions on climate change, energy, health, food security, and gender equality.
"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."
According to a US official, the news that Russia defaulted on its foreign sovereign bonds for the first time since the Bolshevik revolution in 1917 demonstrated the effectiveness of Western sanctions.
"This morning's news around the finding of Russia's default, for the first time in more than a century, situates just how strong the actions are that the U.S., along with allies and partners, have taken, as well as how dramatic the impact has been on Russia's economy," the official added.
The Kremlin quickly dismissed the US statement, accusing the West of forcing Russia into an artificial default.
The G7 countries' additional sanctions will target Moscow's weapons production, as well as its gold imports and Russian-installed officials in contested areas.
According to the official, the G7 leaders would direct their governments to work extensively on how to implement the Russian price ceiling, collaborating with countries around the world and stakeholders including the private sector.
The US also said that it would slap sanctions on hundreds of individuals and entities, in addition to the over 1,000 previously sanctioned, as well as target firms in many countries and put tariffs on hundreds of Russian items.
A second senior administration source said the agencies concerned would share details on Tuesday to reduce any flight risk.
The Ukraine conflict has diverted focus away from another crisis, climate change, which was supposed to dominate the meeting. Activists are concerned that Western nations are watering down their climate objectives by scrambling to find alternatives to Russian gas supplies and instead relying more heavily on coal, a dirtier fossil fuel.
According to sources based on a proposed draught, Japan is also trying to eliminate a target for zero-emission vehicles from a G7 declaration anticipated this week.

Christopher J. Mitchell

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