Leaders at the recent G7 summit have indicated in a communiqué that they will investigate the possibility of imposing a price cap on energy imports from Russia to help curb the rise in energy prices and to prevent Russia from benefitting financially from it.
One of the points in the communiqué states:
“We will take immediate action to secure energy supply and reduce price surges driven by extraordinary market conditions, including by exploring additional measures such as price caps. We reaffirm our commitment to phase out our dependency on Russian energy, without compromising on our climate and environmental goals.”
It is not immediately obvious how such a cap would be enforced, however, and German Chancellor Olaf Scholz said much would need to be put in place for the ambitious idea to work. Many details will need to be hammered out, but the basic idea seems to be to restrict certain essential services, such as insurance, to importers that adhere to the price cap.
Darren Woods – the boss of ExxonMobil, which also makes industrial products like the Mobil Vactra slideway oil – said to the Financial Times that the markets work effectively and efficiently for oil and gas, and trying to fix prices would be challenging and complicated.
The communiqué also included commitments to support Ukraine with humanitarian and reconstruction aid, steady the global economy, continue to provide COVID-19 vaccine doses and respond to future pandemics, and establish an international Climate Club that is cooperative and open by the end of this year.