French Finance Minister Bruno Le Maire speaks on July 25, 2022 at the Finance Ministry in Berlin, Germany.
David Gannon | Afp | Getty Images
French Finance Minister Bruno Le Maire said on Saturday that the G-7 effort to cap Russian oil prices will require commitment from the wider international community to be successful.
On Friday, the economic powers of the G7 announced that they agreed on a plan to introduce a fixed price for Russian oil.
This initiative is the latest attempt to put economic pressure on Moscow in connection with its invasion of Ukraine. But apart from cutting Russia’s oil revenue – a key source of funding for President Vladimir Putin’s military treasury – Le Maire said the policy should be implemented as a “global measure against war.”
“You need coverage because we don’t want this measure to be just a Western measure,” Le Maire told CNBC’s Steve Sedgwick at the Ambrosetti Forum in Italy.
“This should not be a Western measure against Russia, this should be a global measure against war,” he added.
The G7, which includes the US, Canada, France, Germany, the UK, Italy and Japan, has yet to decide how the price cap will be implemented, a process that Le Maire admits will be “pretty difficult.”
However, it is expected to be ready before the beginning of December, when EU sanctions against offshore imports of Russian oil come into force.
“We know we need unity from all 27 member states if you want to get the green light for this restriction,” he said, referring to the non-G-7 bloc of EU countries.
Moreover, however, Le Maire said that this policy would require the participation of other major world economies.
This follows from the comments of Kadri Simson, head of the EU on energy, which encouraged China and India to participatewhich this year increased purchases of Russian oil, taking advantage of preferential rates.
“If we want to be effective in these sanctions, we need to cut the revenues that Russia receives from the sale of oil and gas,” Le Maire said.
Russia has previously said it will not sell oil to countries that set cap prices. And after the G7 announcement on Friday, Russian state-owned energy giant Gazprom said it would not resume gas flows through the Nord Stream 1 gas pipeline due to technical problems.
This comes after gas supplies had already been halted last week due to a planned “maintenance outage” that was expected to last until September 3rd.
Le Maire of France specifically said that Europe’s staunch opposition to Russia, namely through economic sanctions and international diplomacy, indicates the region’s rising status as a “third world superpower.”
“Things are changing radically. Europe is becoming a superpower not only from an economic but also from a political point of view,” Le Maire said.
“I really think we are moving in the right direction for Europe to play its part in the 21stst. century between China and the US,” he added.