G7 leaders discuss Russian oil price cap, agree on infrastructure plan

The Group of Seven (G7) leaders discussed plans to cap the price of Russian oil at the group’s annual meeting on Sunday.

At the start of the meeting in the Bavarian Alps, Britain, France, the United States, Germany, Japan, Italy and Canada had “really constructive” talks on a possible price cap on Russian oil, a German government source told Reuters.

The price cap scheme, promoted by Washington, is part of broader G7 discussions on how to further crank up the pressure on the Kremlin over its “special military operation” in Ukraine without stoking global inflationary pressures.

But it was unclear whether there was a G7 consensus on the plan, with European Council President Charles Michel saying the issue would need to be handled carefully and discussed further.

With the conflict between Russia and Ukraine entering its fourth month, Russia stepped up air strikes on Ukraine over the weekend, which has also seen the fall of a strategic eastern city to pro-Russian forces.

Russia’s defense ministry said it had used high-precision weapons to strike Ukrainian army training centers in Chernihiv, Zhytomyr and Lviv, an apparent reference to strikes reported by Ukraine on Saturday.

At least four explosions shook Kyiv on Sunday. The last major strike on the city was on June 5, when a rail car repair facility was hit on the outskirts. Russia had abandoned an early advance on Kyiv before focusing its military operation on the south and Donbas, an eastern territory made up of Luhansk and its neighbor Donetsk.

The Western alliance supporting Kyiv is starting to show signs of strain as leaders fret about the growing economic cost. However, despite the energy and food shortages and a darkening global economic outlook, Britain, the U.S., Japan and Canada moved to ban imports of Russian gold on the first day of the G7 summit. Russian gold exports were worth $15.5 billion last year.

Infrastructure plan

The G7 leaders agreed on a pledge to raise $600 billion in private and public funds for needed infrastructure in developing countries. The plan aims to counter China and soften the impact of soaring food and energy prices.

U.S. President Joe Biden said his country would mobilize US$200 billion in grants, federal funds and private investment over five years to support projects in low- and middle-income countries that help tackle climate change and improve global health, gender equity and digital infrastructure.

Europe will mobilize 300 billion euros ($316 billion) for the initiative over the same period to build up a sustainable alternative to China’s Belt and Road Initiative scheme, which Beijing launched in 2013, European Commission President Ursula von der Leyen told the gathering.

In response to the expected infrastructure plan at a press conference in mid-June, Chinese Foreign Ministry spokesperson Wang Wenbin said global infrastructure development requires mutual cooperation rather than mutual antagonism.

The infrastructure plan, which was proposed by the U.S., ignores the common wishes of the international community but reveals a propensity to antagonize, Wang said, adding that it will not win popular support.

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