A price cap on Russian oil, deferral of climate change commitments, a potential famine in Africa and the further supply of weapons to Ukraine are to crowd into a meeting of G7 world leaders over the next three days held against the backdrop of the biggest geopolitical crisis since 1945.
The agenda reveals how the world has been turned upside down since leaders of the industrialized nations last met in Cornwall a year ago in a summit chaired by Britain, largely to focus on the threat posed by China.
Before the summit in Germany, Boris Johnson issued a warning for the west not to show war fatigue, a point that will be echoed when the Ukrainian president, Volodymyr Zelenskiy, addresses the meeting by video link. He is expected to emphasize the difficulties his troops are facing in eastern Ukraine as well as the need for heavier long-range weapons.
Andriy Yermak, the head of Zelenskiy’s office, said the G7 should respond to the latest air strikes on Kyiv, which killed one on Sunday, with a full gas embargo.
The overall message from the three-day G7 meeting will be that sanctions are slowly working in degrading the Russian war machine, and will be stepped up if damage to the wider world economy can be contained.
The US president, Joe Biden, urged the G7 to show resolve as he greeted the German chancellor, Olaf Scholz. “We have to stay together, because Putin has been counting on from the beginning that somehow Nato and the G7 would splinter. But we haven’t and we’re not going to.”
A ban on new imports of Russian gold will be one new measure of solidarity with Ukraine, but the idea of a cap on Russian oil prices, backed by the US president, Joe Biden, has forced its way into the discussions as a visible means of slowing rampant inflation, one of the chief topics of conversation when the G7 leaders gathered for their first session over three days in the Bavarian Alps.
Such a price mechanism would set an upper limit on imports of oil from Russia, which would be imposed unilaterally by each participating country and prevent Russia selling at a higher price. For European nations, it is also seen as a way potentially to dampen rampant inflation driven by energy prices.
Some European countries have been wary that it could potentially require the painful reopening of the existing European Union agreement on oil sanctions against Russia. That would need the agreement of all 27 EU member states. The EU is due to phase out its dependence on Russian oil by the end of the year, with some exemptions, but that deal required laborious discussion
It is also unclear how key buyers of Russian crude such as China and India could be coaxed into complying with a price cap. One idea being floated by the US would be to make their access to shipping insurance for oil cargo dependent on not paying more than the agreed fixed cap for the oil onboard. The EU has agreed to ban insurance for the transportation of crude and petroleum products from Russia.
Italy has for weeks been pressing to go further by introducing a cap on gas prices, an idea backed by Italian energy firms. French officials at the summit expressed a willingness to discuss an oil price cap, but suggested Europe needed a broader energy price shield to bring inflation under control.
But there is no guarantee that Vladimir Putin would not respond by cutting gas supplies further. Gazprom cut gas supplies by 60% last week, citing maintenance problems caused by the lack of supply of parts from Canada, an explanation G7 leaders do not regard as credible. The Nord Stream 1 pipeline is due to shut down altogether for regular two-week summer maintenance in July and there are fears Putin would be prepared to take the hit to Russian and Gazprom revenues if he believed it would cause an industrial meltdown across Europe.
EU states are due to have replenished its reserves to 80% by November in preparation for a difficult winter, but there are also complex duties for national reserves to be distributed to countries suffering energy shortfalls.
EU states are already allowing some coal plants to stay open longer than planned. The change in approach to fossil fuels including gas is reflected in the draft communique being less hardline about the need to end all future investments in fossil fuels, but the language is so couched that it also retains commitments toward a radical green energy transition.
This year’s chair of the G7, the German chancellor, Olaf Scholz, has invited as partner countries Senegal, currently chairing the African Union, Argentina, currently heading the Community of Latin American and Caribbean States, as well as Indonesia and India, the current and next hosts of the G20 group of large industrial nations, as well as South Africa. The Indonesian president, Joko Widodo, announced he was joining a long list of mediators in the Ukraine conflict, saying he would travel to Moscow to propose a ceasefire.
African leaders, faced by drought and rocketing wheat prices, will want to hear what is being done to speed the flow of grain out of Ukraine, but discussions about a safe route for grain convoys out of the Ukrainian-run Black Sea port of Odesa is proving difficult. The EU has insisted it is not imposing sanctions on Russian grain or fertilizer exports, and no block on Ukrainian exports would exist but for Russia’s action.
Scholz said: “The summit must send not only the message that Nato and the G7 are more united than ever, but also that the democracies of the world stand together against Putin’s imperialism just as they do in the fight against hunger and poverty.”
The summit is taking place at the castle resort of Schloss Elmau at the foot of Germany’s highest mountain, the Zugspitze – the same venue where the country last hosted the annual G7 meet-up in 2015. That meeting was chaired by Angela Merkel in the wake of the first Russian invasion of Ukraine and Merkel is now seen to have bequeathed her successor to a legacy of overdependence on Russian energy.
George is Digismak’s reported cum editor with 13 years of experience in Journalism