G-7 to tell ministers to explore price cap on Russian gas

Group of Seven leaders are set to instruct ministers to explore implementing a price cap on Russian gas, according to people familiar with the discussions.

The mandate is expected to be announced as the three-day summit ends Tuesday. It comes as part of broader discussions on how to limit the profit Russia makes on its energy exports. The leaders are also expected to mention a mechanism to cap prices on Russian oil in the final communique. 

Capping Russian gas imports would be important for European Union countries such as Italy that rely heavily on Russian supplies and have been pushing the idea both at European and global level. 

Russia’s war and limiting its profits from rising energy prices have been among the main topics of discussion so far for leaders gathered for three days in the Bavarian Alps.

Bloomberg News reported Sunday that the G-7 is discussing an oil price cap and a mechanism to make it work by imposing restrictions on insurance and shipping.

Talks among chief negotiators are ongoing and are expected to continue through the night to agree on the wording of a shared statement, the people said. 

Negotiators—especially those from the US and Italy—have been promoting a system that limits the flow of money to Russia and can also curb inflation as energy prices keep rising. The US has been pushing for a mechanism to cap oil while allowing large buyers, like China and India, to keep buying. Italy’s Prime Minister Mario Draghi has been advocating using a similar mechanism on gas. 

European Union leaders have asked the EU Commission to explore capping gas imports at a certain price. However, some member states remain skeptical about the idea arguing that it distorts markets, while others worry that Russia could retaliate and cut supplies further.

Moscow has already reduced its gas supplies to Europe’s main importers, including Germany and Italy, citing technical issues. EU leaders have accused Russia of weaponizing energy supplies.