G-7 Latest: Leaders Promote Idea of Price Caps on Russian Energy

(Bloomberg) -- Group of Seven leaders agreed that they want ministers to urgently look into how prices of Russian oil and gas can be curbed to limit revenues flowing to President Vladimir Putin, though exactly how the initiatives would work remained unclear.

Most Read from Bloomberg

• Russia Slips Into Historic Default as Sanctions Muddy Next Steps

• Big Tech Sinks Stocks Bruised by Recession Jitters: Markets Wrap

• China Cuts Travel Quarantine in Biggest Covid Zero Shift Yet

• Tesla Cuts 200 Autopilot Workers as It Closes California Site

• NATO Expansion Moves Ahead With Finland, Sweden Agreement

“We reaffirm our commitment to phase out our dependency on Russian energy,” the leaders said in a joint statement Tuesday following their three-day summit in the Bavarian Alps. “In addition, we will explore further measures to prevent Russia from profiting from its war of aggression.”

The move by the club of rich nations comes as part of a broader push to choke off the profits Russia makes from energy exports that are helping to fund its invasion of Ukraine. The war has been the dominant topic at the gathering at Schloss Elmau hosted by German Chancellor Olaf Scholz, where leaders pledged indefinite support for the government in Kyiv.

Key Developments

• G-7 Grapples for Ways to Punish Russia While Taking on China

• From Scholz to Biden, a G-7 Scorecard of How Each Leader Got On

• G-7 Oil Price Cap Idea Beloved by Economists Faces Harsh Reality

• G-7 Launches Climate Club in Attempt to Avoid Green Trade Wars

• G-7 to Allow Fossil-Fuel Financing If Climate Pledges Are Kept

(All times CET)

Kishida Wants ‘Freedom’ Partnership With Europe (4 p.m.)

Japanese Prime Minister Fumio Kishida said he wants to strengthen ties with NATO and build a “partnership for freedom and democracy” between Europe and the Indo-Pacific.

Kishida spoke at a news conference in Munich just before departing for Madrid, where he will be the first Japanese premier to attend a NATO summit.

Canada May Expand Energy Support for Europe (3:45 p.m.)

Canadian Prime Minister Justin Trudeau said his country is looking at expanding energy infrastructure to help Europe over the “medium term” to transition away from Russian oil and gas.

Trudeau said, without providing details, that there are opportunities to build facilities that could export liquefied natural gas to the continent. The infrastructure could then be used for hydrogen exports in the future, he said, keeping it consistent with Canada’s longer-term climate goals.

G-7 Launches Club to Tackle Climate Change (3:15 p.m.)

Leaders agreed to form a Climate Club, where members agree on joint rules and standards in the fight against global warming with the hope that it will avoid spats over green tariffs.

The initiative was a significant achievement for Scholz, who has made better coordination on climate protection measures a key theme of his G-7 presidency. “We note with concern that currently neither global climate ambition nor implementation are sufficient to achieve the goals of the Paris Agreement,” the leaders said in a joint statement. The Climate Club will address that by “accelerating climate action and increasing ambition, with a particular focus on the industry sector.”

Putin Won’t Attend G-20 in Person, Draghi Says (3 p.m.)

Italian Prime Minister Mario Draghi said Indonesian President Joko Widodo told the G-7 gathering that Putin won’t attend a G-20 summit in November in person.

“Widodo was categorical, he has excluded it, he will not come,” Draghi said at a news conference. “What might happen, is a remote appearance, but this is not clear, we will see.” An official familiar with the Indonesian government’s thinking said the invite for Putin to attend stands and it’s up to him if he comes in person or takes part virtually.

Both Putin and Ukrainian President Volodymyr Zelenskiy have accepted invitations to the meeting in Bali from G-20 presidency Indonesia. Putin has declined to meet with Zelenskiy, who has said it’s the only way to end the war.

Asked earlier whether Germany and other G-7 nations will attend the meeting in Bali, Scholz said there was “broad agreement” among the leaders that they “don’t want to drive the G-20 apart.” “As things stand, the decision of the countries gathered here was that they will attend,” Scholz said at a news conference.

Oil-Price Cap ‘Very Ambitious,’ Scholz Says (2:15 p.m.)

Scholz hinted that he’s skeptical about the viability of a cap on the price of Russian oil, saying it’s “a very ambitious and prerequisite-rich plan.”

“That’s why there will still be a lot of work on this to do,” he said at his concluding news conference. At a separate briefing, French President Emmanuel Macron said sanctions on Russia “will remain for as long as needed and with the necessary intensity in the coming weeks and months.”

Biden-Erdogan Meeting at NATO Summit Uncertain (11:30 a.m.)

A possible bilateral meeting between President Recep Tayyip Erdogan and US President Joe Biden on the sidelines of this week’s NATO summit in Madrid is one of the most anticipated of the gathering in the Spanish capital, except neither are confirming it will happen.

At stake is whether Biden can do something to overcome Turkey’s opposition to Sweden and Finland joining the military alliance. The two men spoke earlier Tuesday and Erdogan was first to announce it to state television.

It’s pretty clear what he’s after. Erdogan pointedly said he wants to discuss F-16 fighter aircraft and mentioned seeing the president on the sidelines of NATO. The White House, in its own statement, confirmed the call and said Biden “looks forward” to seeing Erdogan.

Leaders Commit $4.5 Billion to Fight Famine (11:10 a.m.)

In a separate statement on global food security, leaders committed to providing an additional $4.5 billion “to protect the most vulnerable from hunger and malnutrition” and called on Russia to unconditionally end its blockade of Ukraine’s Black Sea ports and attacks on key infrastructure.

“We are strongly supporting Ukraine in resuming its agricultural exports to world markets, as well as UN efforts to unlock a safe maritime corridor through the Black Sea,” according to the statement.

G-7 Wants China to Intervene With Russia (10:45 a.m.)

In the draft of their statement, leaders called on China to use its influence with Russia to try to convince Putin to end what they called the “unjustifiable, unprovoked and illegal war against Ukraine.”

The government in Beijing should urge Russia to “stop its military aggression -- and immediately and unconditionally withdraw its troops from Ukraine,” according to the text of the statement.

They also said they are “gravely concerned about the human rights situation in China” and called on the government to respect universal human rights and fundamental freedoms, including in Tibet and in Xinjiang, where they said “forced labor is of major concern” to them.

G-7 Reference Chinese Competition Curbs (10:30 a.m.)

The leaders also referenced what they called “challenges posed by non-market policies and practices which distort the global economy” practiced by China.

“We will build a shared understanding of China’s non-transparent and market-distorting interventions and other forms of economic and industrial directives,” the statement said. “We will then work together to develop coordinated action to ensure a level playing field for our businesses and workers.”

US National Security Adviser Jake Sullivan said Monday that Biden and Chinese leader Xi Jinping are expected to engage over the course of the next few weeks.

Biden to Leave Early for NATO Summit (10 a.m.)

Biden will leave the summit at Schloss Elmau early to head to Madrid for a meeting of NATO leaders that starts later on Tuesday, the White House said.

Leaders meeting in the Spanish capital will sign off on a document outlining the alliance’s priorities for the coming decade. The so-called Strategic Concept is set to label China a “systemic challenge” while also highlighting Beijing’s deepening partnership with Russia, according to people familiar with the matter. The previous version, published in 2010, made no mention of China and referred to Russia as a partner, wording that is set to be scrapped.

Biden Summit Bilaterals Limited (9:30 a.m.)

Biden had a handful of meetings with world leaders behind closed doors at the summit. He huddled with Japan’s Kishida out of view of reporters, and they discussed the NATO summit, which will include Indo-Pacific leaders like Kishida for the first time, according to the White House.

Biden also spoke about food security, Ukraine and infrastructure in a private meeting with Senegalese President Macky Sall, who was invited to the summit as one of a number of special guests, according to the White House. The only public meetings Biden has held with G-7 counterparts was a Sunday huddle with Scholz and a separate meeting with Scholz, Macron and British Prime Minister Boris Johnson.

Macron was also captured on camera telling Biden about a conversation he had with the UAE’s Mohammad bin Zayed about oil production.

G-7 Says Kremenchuk Attack a ‘War Crime’ (7:30 a.m.)

Scholz and his fellow leaders published a statement late Monday in which they condemned what they said was Russia’s “abominable” missile attack earlier in the day on a shopping mall in central Ukraine, which left at least 18 people dead and dozens injured.

G-7 leaders said that “indiscriminate attacks on innocent civilians constitute a war crime” and vowed that Putin and those responsible would be held to account.

“We will continue to provide financial, humanitarian as well as military support for Ukraine, for as long as it takes,” according to the statement.

Yellen Presses Europeans on Price Cap for Oil (7 a.m.)

US Treasury Secretary Janet Yellen is pressing European counterparts to embrace measures designed to enforce a price cap on Russian oil, a move that officials in Washington hope will maintain global supplies while at the same time limiting Moscow’s revenue.

Yellen spoke Monday with Constantinos Petrides, the finance minister of Cyprus, a major maritime player that serves as Europe’s largest ship-management center. The two “spoke about the goal of placing a price limit on Russian oil to deprive the Kremlin of revenue to finance their war in Ukraine while mitigating spillover effects for the global economy,” the Treasury said in a statement.

Most Read from Bloomberg Businessweek

• Moving to Ban Juul, the FDA Delivers a Blow to Big Nicotine

• Why You Should Quit Your Job After 10 Years

• You Can Give People What They Want. Or You Can Give Them Web3

• ADT Is Betting Google Can Drag It Into the Future

• How Generations of Black Americans Lost Their Land to Tax Liens

©2022 Bloomberg L.P.