G7 countries plan to limit the purchase of Russian gas — to set a price limit at which they will buy it

Oleksiy Yarmolenko

The G7 countries have agreed to discuss the possibility of limiting Russian gas prices. This means that it will be bought only if the price does not exceed a certain limit.

This is stated in a joint statement by the leaders of the G7 countries.

They stressed that they would continue to abandon Russian energy resources in order to reduce Russiaʼs ability to finance the war in Ukraine.

"In this regard, we welcome the decision of the European Union to explore with international partners ways to curb rising energy prices, including the possibility of introducing a temporary limit on import prices, where appropriate. We will continue to reduce our dependence on civilian nuclear and related goods from Russia and help countries seeking to diversify their supplies. We instruct our relevant ministers to immediately assess the feasibility and effectiveness of these measures," the statement said.

The G7 leaders also say they will discuss a number of approaches to completely ban Russian oil and petroleum products around the world. They are committed to helping the most dependent countries on Russian oil products with alternative energy resources.

How effective are such restrictions?

In fact, the EU and Russia are interdependent on gas. The EU — from the purchase of Russian gas, and Russia — from its sale. The vast majority of Russian gas exports and gas pipeline systems are directed to Europe itself. So, if the EU refuses to buy Russian gas, Russia will have to look for other sales channels, and these are huge amounts of energy that no one may need. In addition, the gas transportation system of the Russian Federation is not focused on this.

At present, the European Union cannot completely abandon Russian gas, but due to the importance of the European market for Russia, the EU may try to impose its price conditions, in particular, impose additional duties on Russia or set a price limit. In this case, Russia will be forced to either agree to these terms, or completely abandon the sale of Russian gas to Europe, which will significantly affect revenues in Russia.