G7 leaders began their three-day summit on Sunday by announcing sanctions on Russian gold and weighing more measures on oil to ensure that soaring prices do not give Moscow an economic advantage.
The talks between the leaders of Germany, Britain, France, Italy, the US, Canada and Japan at a retreat in the Bavarian Alps will be dominated by the invasion of Ukraine that is now in its fifth month despite western sanctions against Russia.
Behind the handshakes and heavy security, there are differing opinions within the club of rich democracies over how hard to squeeze Russia before the measures become too much of a burden on the countries imposing them.
Although one line of thinking among officials is that sanctions will become more potent as Russia’s military and economy are denied resources to rebuild, sceptics said they have not achieved the goal of forcing a change of heart.
US President Joe Biden is floating the idea of a price cap on Russian oil to toughen sanctions and avoid a situation where the Kremlin receives more money for fewer exports because of the runaway price of fuel.
American diplomats suggested that this could be done by blacklisting oil tankers if the fuel they are carrying is above the price cap, meaning they could not receive shipping insurance.
The US is “looking for ways to minimise the effect of rising oil prices and the profits that Mr Putin continues to get from those oil prices”, said national security spokesman John Kirby, referring to the Russian president.
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Britain's Prime Minister Boris Johnson, US President Joe Biden, German Chancellor Olaf Scholz, France's President Emmanuel Macron and Italian Prime Minister Mario Draghi chat before their meeting at Elmau Castle on Tuesday morning. Getty Images -
Olaf Scholz speaks at a press conference at Elmau Castle. EPA -
Joe Biden waves as he crosses the tarmac next to Air Force One at Munich International Airport. The US president is leaving Germany on his way to Spain to attend a Nato summit. AP -
Boris Johnson speaks to press at the G7 summit. PA -
Emmanuel Macron holds a press conference at Elmau Castle. AFP -
Vans equipped with electronic detection devices are stationed in front of Elmau Castle, where the G7 summit is taking place. AFP -
Boris Johnson makes a point during a meeting with the Prime Minister of Japan Fumio Kishida. PA -
Clockwise from centre: Olaf Scholz; Joe Biden; Boris Johnson; Fumio Kishida; European Commission President Ursula von der Leyen, European Council President Charles Michel; Mario Draghi; Canada's Prime Minister Justin Trudeau, and Emmanuel Macron listen to an online address by Ukraine's President Volodymyr Zelenskyy at the G7 summit in Bavaria. Reuters -
Volodymyr Zelenskyy attends a working session of G7 leaders via video link from Kyiv, Ukraine. Reuters -
Olaf Scholz waves alongside G7 leaders and participants of the outreach programme as they pose for a 'family photo' at the Bavarian resort of Schloss Elmau. Reuters -
Emmanuel Macron greets India's Prime Minister Narendra Modi during the official welcome ceremony of G7 leaders. AP -
G7 leaders meet outreach guests at the summit. Reuters -
Boris Johnson speaks to Charles Michel. PA -
Amelie Derbaudrenghien, Britta Ernst, Carrie Johnson and Brigitte Macron at Elmauer Alm Mountain Restaurant. Reuters -
G7 leaders Olaf Scholz and Justin Trudeau talk a walk at Elmau Castle in Bavaria. EPA -
European Council President Charles Michel greets Japanese Prime Minister Fumio Kishida on the sidelines of the G7 summit at Castle Elmau in Bavaria. AP -
Horseback police patrol at Elmau Castle in Bavaria. EPA -
G7 leaders have dinner at Elmau Castle in Kruen, Germany. Clockwise from front left, European Council President Charles Michel, Italy's Prime Minister Mario Draghi, Canada's Prime Minister Justin Trudeau, French President Emmanuel Macron, German Chancellor Olaf Scholz, US President Joe Biden, British Prime Minister Boris Johnson, Japan's Prime Minister Fumio Kishida and European Commission President Ursula von der Leyen. AP -
From left, Mr Draghi, Ms von der Leyen, Mr Biden, Mr Scholz, Mr Johnson, Mr Trudeau, Mr Kishida, Mr Macron and Mr Michel. AFP -
Flowers for President Alberto Fernandez of Argentina at Munich Airport as he arrives to take part in the G7 summit in Bavaria. AFP -
Elmau Castle in southern Germany, the venue for the G7 summit. AFP -
The view from a German armed forces helicopter on its way to the G7 summit at Elmau Castle. AFP -
Gazing out from the helicopter. AFP -
In Berlin, campaigners sit near a sign reading 'G7: Who owes who?' at the Ministry of Finance building to demand debt relief for countries of the global south. Reuters -
From left, Mr Michel, Mr Draghi, Mr Trudeau, Mr Macron, Mr Scholz, Mr Biden, Mr Johnson, Mr Kishida and Ms von der Leyen at the summit at Elmau Castle. EPA -
Mr Draghi talks with Mr Biden. EPA -
Mr Scholz shakes hands with Mr Kishida. EPA -
Mr Johnson, Mr Scholz and Mr Biden. AFP -
A worker cleans the red carpet at Elmau Castle in the Bavarian mountains. AFP -
Mr Kishida leads the Japanese delegation. AFP -
The G7 logo at Elmau Castle. AFP -
Mr Biden and Mr Macron. AP -
The leaders at a photocall. Reuters -
Mr Biden walks with Ms von der Leyen and Mr Michel. Reuters -
Former German alpine ski racer Christian Neureuther, British Prime Minister's wife Carrie Johnson, former German biathlete Miriam Neureuther, French President's wife Brigitte Macron, German Chancellor's wife Britta Ernst and European Council President's wife Amelie Derbaudrenghien take part in a Nordic Walk as part of the spouses' programme. Reuters -
Mr Macron, Mr Biden, Ms von der Leyen and Mr Trudeau. AP -
Mr Draghi, Mr Trudeau, Mr Michel, Mr Scholz and Mr Johnson. AFP -
Ms von der Leyen chats with Mr Trudeau. AFP -
Mr Biden is welcomed by Mr Scholz and his wife Britta Ernst. AP -
The leaders get down to business. AP -
Mr Scholz and Ms Ernst welcome the Macrons. Reuters -
Mr Macron, Mr Biden and Ms von der Leyen. AP -
Mr Scholz greets Mr and Mrs Johnson. PA -
Mr Scholz and Ms Ernst welcome Ms von der Leyen to Elmau Castle. AFP -
Mr Johnson meets Mr Trudeau. PA -
A helicopter flies over the G7 venue. AP Photo
European countries have said they are willing to discuss the idea, but are wary of charging back into the oil sanctions debate weeks after fractious talks on an embargo tested western unity over Ukraine.
The EU, also represented at the summit, eventually agreed an oil embargo last month but only after conceding to Hungary that pipeline deliveries were exempt and offering grace periods to other countries.
Government sources in Germany, which holds the G7’s rotating presidency and is hosting the summit at the Schloss Elmau resort, about 105 kilometres south of Munich, said talks were looking at how a price cap could work and how EU sanctions could align with those of its partners.
German Chancellor Olaf Scholz suggested the net might have to be cast wider than the G7 because “only something that everyone does together can work”.
Ukraine conflict — in pictures
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Ukrainian servicemen in a shelter at the frontline near Kharkiv. AP -
A Ukrainian and his puppy in the Donetsk region. AP -
Australian Prime Minister Anthony Albanese, third left, is shown apartment buildings damaged by Russian shelling during his visit to Irpin on the outskirts of Kyiv. AP -
Rescue specialists work at the site of a destroyed residential building after blasts in Belgorod, Russia. Reuters -
A woman lays flowers during a demonstration against the invasion of Ukraine in front of the Palais des Nations, in Geneva, Switzerland. EPA -
A woman injured when her house was damaged by the Russian shelling sits in the yard of her house, in Bakhmut, Ukraine. AP -
Local residents stand next to a damaged residential building in the town of Serhiivka, about 50 kilometres south-west of Odesa, Ukraine. AP -
Viktor Shevchenko stands in a crater to show its depth after a Russian shelling in the Saltivka district in Kharkiv. AP -
An image taken from a video provided by the Ukrainian Presidential Press Office purports to show the moment a missile struck the shopping mall in Kremenchuk. AP -
People watch as smoke rises after a Russian missile strike hit a crowded shopping mall, in Kremenchuk. AP -
Firefighters clean the rubble of the destroyed Amstor shopping mall in Kremenchuk. EPA -
A woman cries after the body of her husband, who was killed in the yard of an apartment building during shelling, was loaded into an ambulance in Kharkiv, Ukraine. AP -
Firefighters and rescue workers at the destroyed Amstor shopping mall. EPA -
Rescuers work at the site of a shopping mall hit by a Russian missile strike, in Kremenchuk. Reuters -
A couple wounded by a Russian missile strike hold hands in a hospital, in Kremenchuk. Reuters -
People wait to receive humanitarian aid in front of a residential building damaged during a Russian attack in Borodyanka, Ukraine. EPA -
Ukrainian servicemen take a bus to their positions near Severodonetsk, in Luhansk area. EPA -
A Ukrainian service member and a dog in the industrial area of the city of Severodonetsk. Reuters -
A couple sits in front of a residential building that was damaged during a Russian attack, in Borodyanka. EPA -
Local residents receive humanitarian aid in Borodyanka. EPA -
A Ukrainian armed forces tank in Severodonetsk. Reuters -
Ukrainian service members walk past a damaged car in Severodonetsk. Reuters -
A giant Ukrainian flag is held up during the benefit concert 'Embrace Ukraine' on the Museumplein in Amsterdam. The free event will raise money for victims of the war in Ukraine and the purchase of mobile X-ray equipment that the country needs. EPA -
A fire from a gas processing plant continues to burn behind a field of wheat after it was hit by shelling a few days earlier in Andriivka, in the Kharkiv region. Reuters -
An onlooker takes in the damage from overnight shelling on Kharkiv's Housing and Communal College. Reuters -
A destroyed tank in the village of Novoselivka, outside Chernigiv. AFP -
A man decorates a toy cabin for children made from used ammunition crates in the village of Novoselivka, outside Chernigiv. AFP -
An internal view of the Housing and Communal College building damaged by recent shelling in Kharkiv. EPA
One EU official said the stand-off with Hungary had shown it was right to take time over sanctions and that there was no intention to reopen its sixth package.
Nonetheless, amendments could be made to address loopholes in the package, which did venture into the insurance market to weaken Russia’s ability to sell oil to other countries.
The US announced an oil and gas embargo in March, while Britain said it would end oil imports by the end of the year. The EU moved more slowly because many of its members rely on Russian fuel imports.
The EU official said the G7 had a particularly important role this year because the other main club of wealthy countries, the G20, includes Russia and therefore can hardly act unanimously to punish the Kremlin.
Four G7 members — the UK, US, Japan and Canada — announced an embargo on Russian gold, with Britain saying it would stop Kremlin-friendly oligarchs from buying bullion to get around sanctions.
“We need to starve the Putin regime of its funding. The UK and our allies are doing just that,” said Britain’s Prime Minister Boris Johnson, who is expected to urge France and Germany to toughen their stances on Russia.
The G7 agreed at talks in March that they would home in on gold transactions by Russia’s central bank but had not announced a full import ban.
European Council President Charles Michel said the EU was willing to consider tackling gold via its more laborious sanctions process. Gold exports are worth about $15.5 billion a year to the Russian economy, according to customs data.
UK Chancellor of the Exchequer Rishi Sunak said Britain’s intervention was significant given London’s prominent role in the gold market.
G7 leaders are expected to adopt separate conclusions on Ukraine in addition to their main communique, in what German officials hope will be a show of solidarity with the country.
Leaders will return to the issue of Ukraine on Monday when President Volodymyr Zelenskyy is scheduled address the summit online.
