The West has already sanctioned many Russian energy exports, but Moscow has continued to earn billions of dollars a month by diverting oil to China and Asia. The United States, Europe, Canada and Japan have been exploring what more they can do for months. Finance ministers from the G7 countries aim to reach an agreement on Friday. The Biden administration is pushing governments to introduce a price cap because it would reduce the revenue President Vladimir Putin needs to fund his war in Ukraine, while theoretically allowing Russian barrels to keep flowing to world markets, avoiding a new inflationary supply shock. “This is the most effective way, we believe, to hit Putin’s revenues hard, and to do so will result not only in reducing Putin’s oil revenues, but also in global energy prices,” his spokeswoman said. White House Karin Jean-Pierre. he said earlier this week. But the measure would be extremely complicated for the police. How, when and to what extent the price of Russian oil could be contained remains to be seen. It would also need broad international support to be effective. British Finance Minister Nadeem Zahawi said Thursday he was optimistic G7 ministers would reach an agreement. “It’s important because the British right now are under enormous pressure,” he said during an event organized by the American Enterprise Institute, a Washington think tank. “There is real stress on households, on businesses, because of the energy surge,” he added. Since early July, oil prices have fallen about 18% on expectations that the recession will reduce demand, but are still about 20% higher than a year ago. Novak called the proposals to impose restrictions “absolutely absurd” and said they could destroy the global oil market, TASS reported. “Such efforts will only destabilize the oil industry, the oil market,” he said. “This will completely destroy the market,” he added. Europe and the United States have banned most Russian oil imports. But the plan to pile the pain on Putin didn’t work. Flows of crude oil and other petroleum products to the United States, the United Kingdom, the European Union, Japan and South Korea have fallen by nearly 2.2 million barrels per day since the start of the war in Ukraine, according to the International Energy Agency. However, two-thirds of that decline has been rerouted to other markets such as China and India, helping to fill Moscow’s coffers. Export earnings in July were about $19 billion, the IOC said. One option the G7 could adopt would be to ban companies based in G7 countries from providing insurance or financing for oil cargoes if buyers paid above a certain price. Russia’s control of large parts of the world’s energy reserves remains a major challenge six months after its invasion of Ukraine. This week, Russia temporarily cut off gas deliveries to the region through a vital pipeline and cut off all supplies to a French utility, exacerbating problems that have driven European inflation to a record high of 9 percent. Russian state energy giant Gazprom said the cut in deliveries via the Nord Stream 1 pipeline was due to a planned shutdown for a few days for maintenance work. It is supposed to reopen on Saturday. — Anna Cooban and Manveena Suri contributed to this report.
