Members of the G7 have agreed to impose a price cap on Russian oil in a bid to hit Moscow's ability to finance the war in Ukraine.
File photo. Photo: AFP
Finance ministers said the cap on crude oil and petroleum products would also help reduce global energy prices. The cap will be set at a level based on a range of technical inputs.
"We will continue to stand with Ukraine for as long as it takes," the G7 said.
Russia said it would stop selling oil to countries that imposed price caps.
"Companies that impose a price cap will not be among the recipients of Russian oil," Kremlin spokesman Dmitry Peskov said.
The G7 (Group of Seven) consists of the UK, US, Canada, France, Germany, Italy and Japan. The group is an organisation of the world's seven largest "advanced" economies, which dominate global trade and the international financial system.
At their virtual meeting, the finance ministers said the oil price cap plan was "specifically designed" to reduce Russian revenues and its ability to "fund its war of aggression". They also said they wanted to minimise the damaging economic fallout of the conflict, "especially on low and middle-income countries".
The introduction of a price cap on Russian oil means countries that sign up to the policy will only be permitted to purchase Russian oil and petroleum products transported via sea that are sold at or below the price cap.
In the aftermath of Russia's invasion of Ukraine the price of oil soared and has remained at high levels, meaning Russia has increase its revenues from the fossil fuel despite its export volumes falling.
The EU plans to impose an embargo on Russian crude oil from 5 December. It will apply to crude shipped by tanker and most piped supplies.
China and India - major trading partners for Russia - may not follow G7 policy on Russian oil, analysts say. They have not joined the Western sanctions targeting Russia.
UK Chancellor Nadhim Zahawi said the G7 were "united against this barbaric aggression", adding the price cap would "curtail Putin's capacity to fund his war".
US Treasury Secretary Janet Yellen said a cap would also help fight inflation, which is on the rise in many of the world's economies.
The price cap helps achieve "our dual goals of putting downward pressure on global energy prices while denying Putin revenue to fund his brutal war in Ukraine", she said.
Russia to keep key gas pipeline to EU closed
Russia's gas pipeline to Germany will not reopen as planned on Saturday, state energy firm Gazprom has said.
The firm said it had found an oil leak in a turbine on the Nord Stream 1 pipeline, meaning it would be closed indefinitely.
The pipeline has been shut down for the past three days for what Gazprom described as maintenance work.
The news comes amid growing fears that families in the EU will not be able to afford the cost of heating this winter.
Energy prices have soared since Russia invaded Ukraine and scarce supplies could push up the cost even further.
Europe is attempting to wean itself off Russian energy in an effort to reduce Moscow's ability to finance the war, but the transition may not come quickly enough.
Moscow denies using energy supplies as an economic weapon in retaliation for Western sanctions imposed following Russia's invasion.
It has blamed the sanctions for holding up routine maintenance of Nord Stream 1, but the EU says this is a pretext.
Germany's network regulator, the Bundesnetzagentur, said the country was now better prepared for Russian gas supplies to cease, but it urged citizens and companies to cut consumption.
- BBC