ELMAO, Germany (AP) – Leaders of the world’s richest democracies have taken a united stand to support Ukraine “as long as it takes” as the Russian invasion drags on, and said they would explore far-reaching steps to reduce the Kremlin’s income from war-funding oil sales.
The closing statement of the Group of Seven summit on Tuesday 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” measures to prevent 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.
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.
The price cap works in theory by preventing service providers such as shippers or insurance companies from handling oil at a price 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 blocked Russian oil imports, which were small anyway. The European Union has decided to ban 90% of Russian oil that comes by sea, but that won’t take effect until the end of the year, meaning Europe continues to send money to Russia for energy even while denouncing the war. Meanwhile, rising global oil prices have softened the blow to Russian income, even as Western traders shun Russian oil.
Power 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.
German Chancellor Olaf Scholz, the summit host, defended the G7’s decision to ease commitments to end public support for fossil fuel investments, saying the war in Ukraine meant time-limited support for new natural gas extraction projects might be necessary.
“In these exceptional circumstances, publicly backed investment in the gas sector could be appropriate as an interim response,” the G7 nations said in a statement on Tuesday at the conclusion of their three-day summit.
Before the summit concluded, the leaders joined in condemning what they called the “abhorrent” Russian attack on a shopping mall in the town of Kremchuk, calling it a war crime, and vowing that President Vladimir Putin and others involved would be “accountable.”
The leaders of the United States, Germany, France, Italy, the United Kingdom, Canada and Japan pledged on Monday to support Ukraine “How long it takes” after a video link consultation with Ukrainian President Volodymyr Zelensky.
The host of the summit, German Chancellor Olaf Schulz, said he had “once again conclusively defined the situation as Ukraine currently sees”. Zelensky’s speech came hours before Ukrainian officials announced a deadly Russian missile attack on a crowded shopping mall In the city center of Kremenchug.
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.
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.
At a time when Ukraine dominated the group’s annual gathering and due to spillover effects of war, such as the challenge to food supplies in parts of the world due to disruption of Ukrainian grain exports, Schultz was keen to show that the G-7 could also move forward with pre-war priorities. .
Members of the Group of Seven major economies 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 preventing global temperatures from rising more than 1.5 degrees Celsius (2.7 degrees 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.
Speaking at the end of the three-day summit in Elmau, Germany, Schulz said the goal was to “ensure that climate protection is a competitive advantage rather than a disadvantage”.
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
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