SCHLOSS ELMAU, Germany (Reuters) – A senior U.S. official said Monday that the Group of Seven rich democracies will agree on Tuesday to a new set of coordinated actions to put more pressure on Russia over its war in Ukraine. They will also finalise plans to put a price cap on Russian oil.
When the announcement was made, it looked like it was going to have its first sovereign default in decades. At the same time, Ukrainian President Volodymyr Zelensky spoke to G-7 leaders meeting at an alpine resort in southern Germany.
“The dual goals of G7 leaders have been to take direct aim at (Russian President Vladimir) Putin’s revenues, especially through energy, and to minimise the spillovers and effects on the G7 economies and the rest of the world,” a US official said on the sidelines of the annual G7 summit.
Nearly half of the world’s economic output comes from the G7 countries. They are determined to put more pressure on Russia without making inflation even worse, which is hurting the global south the most. The price cap could make money out of the Kremlin’s war chest, but it would also lower the price of energy.
In a fact sheet, the White House said that G7 leaders will also make a “unprecedented, long-term security commitment” to give Ukraine financial, humanitarian, military, and diplomatic support for as long as it takes. This includes giving Ukraine advanced weapons on time.
Sanctions from the West have hurt Russia’s economy a lot, and the new measures are meant to stop the Kremlin from getting more money from oil sales. The U.S. official said that the G7 countries will work with others, like India, to limit how much money Putin can continue to make.
The official said that the news this morning that Russia has defaulted on its debt for the first time in more than a century shows how strong the actions the U.S. and its allies and partners have taken and how dramatic the effects have been on Russia’s economy,” the official said.