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G7 leaders are seeking a deal to impose a “price cap” on Russian oil as the group works to curb Moscow’s ability to finance its war in Ukraine.
Talks on the idea were set to continue last night at the luxury resort of Schloss Elmau in the Bavarian Alps, where leaders want to enlist a range of countries beyond the G7 to put a ceiling on the price paid for Russian oil.
They hope that a cap would limit the benefit to the Kremlin war machine of the soaring price of crude while cushioning the impact of higher energy prices on western economies.
The idea has been strongly promoted by the US and recent comments by German officials suggest Berlin is also coming around to the idea.
Caps will be debated today with a broader group as the leaders of Germany, the US, UK, France, Italy, Japan and Canada are joined by “partner” countries invited to the summit. They include India, which has become a big buyer of discounted Russian oil since the invasion of Ukraine, as well as Argentina, South Africa, Senegal and Indonesia.
Charles Michel, president of the European Council, said the EU was ready to decide with its partners on a price cap but stressed the need for a “clear vision” and awareness of possible knock-on effects. “We want to make sure the goal is to target Russia and not to make our life more difficult and more complex,” he said.
A senior German official said “intensive discussions” were under way on how a cap would be implemented and work with western and Japanese sanctions. “The issues we have to solve are not trivial, but we’re on the right track towards coming to an agreement,” he said.
Last month the EU agreed to a phased-in ban on seaborne Russian oil shipments while temporarily allowing crude deliveries via pipeline to continue. The US has already banned Russian oil imports and the UK plans to phase them out by the end of this year.
Thanks for reading FirstFT Asia. To start your week, here’s the rest of the day’s news. — Sophia
Five more stories in the news
1. Russian missiles strike Kyiv as G7 leaders meet in Germany Residential buildings in Kyiv’s central Shevchenkivsky district were hit by Russian missiles yesterday morning. The new attacks came as more western artillery is being delivered to Ukraine to help fend off the Russian offensive in the country’s east.
2. Leading economies at risk of falling into high-inflation trap The Bank for International Settlements warned yesterday that leading economies are approaching a world where rapid price rises dominate daily life and are difficult to quell. The BIS recommended that central banks should not be shy of inflicting short-term pain and even recessions to prevent it.
3. Japan’s biggest chipmakers brace for engineer shortage The largest producers of semiconductors, from Toshiba to Sony, are warning that the government’s push to revive its domestic chip industry is being threatened by a shortage of engineers after an industry body said the eight biggest manufacturers would need to hire 35,000 engineers in the next 10 years to keep pace with investment.
4. Iran and EU will resume talks to revive nuclear accord After being placed on hold in March, negotiations over reviving the 2015 nuclear accord will resume soon. US president Joe Biden is willing to resurrect the agreement, but Trump’s terrorist designation of Iran’s Revolutionary Guards is seen as a major obstacle.
5. Internet Explorer shutdown causes problems in Japan Microsoft said farewell to Internet Explorer on June 16, stirring panic among government agencies, financial institutions, and other organisations whose websites are only compatible with the now-discontinued web browser. The procrastination over moving away from IE has resulted in a last-minute chaotic transition.
The day ahead
BET Awards The 22nd annual Black Entertainment Television Awards takes place tonight in the United States, celebrating the best in black music, film, video and sports.
Company earnings Nike will post their Q4 results today.
UN Ocean Conference Co-hosted by the governments of Kenya and Portugal, the United Nations’ week-long conference on ocean conservation and sustainability begins today.
UK lawyers on strike Members of the Criminal Bar Associate begin strike action today in the UK in an escalating dispute with the government over funding of trials. The walkout by criminal defence barristers is likely to cause widespread disruption to court hearings across England and Wales.
What else we’re reading
Abortion in America — the road to rolling back Roe vs Wade As the Supreme Court prepares to roll back the landmark 1973 ruling, Lyz Lenz documents the rise of the Christian right and how it reached this historic moment.
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How the fast-paced beauty industry left a tortoise like Revlon trailing Once a behemoth of the beauty industry, Revlon has been sidelined by modern influencer- and social media-driven make-up brands. The 90-year-old US group filed for bankruptcy last week, showing how competitive and fast-paced the sector has become.
There’s no such thing as an accidental plagiarist The acclaimed Australian novelist John Hughes claims that many of the 58 instances of plagiarism in his new book were done by accident. Everyone steals when they write, but where does “good” theft end and clumsy rip-off start?
Tofu is a cornucopia of taste. No really. Tofu is ubiquitous in China as part of a normal everyday diet. Now, westerners are beginning to open their eyes to the many exciting possibilities of tofu as well, and the spectrum of textures and flavours that it brings.
The world that decides what porn you see The de facto regulator of the adult industry isn’t a government, international convention or the business itself. It is Mastercard and Visa. The payments companies wield this power uncomfortably, relying on a cadre of satraps to make occasionally bizarre distinctions, such as the conditions of acceptable vampire sex.
Books
Whether you are looking for a book on urbanism, a literary thriller, a cultural criticism, a memoir, a tome on the royal family, or something else altogether unexpected, you’ll want to take a look at these must-read titles recommended by FT writers and editors.
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