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Russia plots next move as G7, EU and Australia aim ‘immediate hit’ at Putin

Moscow says it is preparing its next move after the latest tactic by the G7 and EU nations — joined by Australia — to starve Russia’s economy.

The joint nations announced a price cap on Russian oil starting Monday (local time) that stops countries paying more than $US60 ($88) per barrel for seaborne crude oil.

US President Joe Biden said the plan would be an immediate hit on President Vladimir Putin and his nation’s oil-enriched coffers.

A joint statement of the G7 (US, Canada, Britain, France, Germany, Italy, Japan), the EU and Australia said the plan was designed to “prevent Russia from profiting from its war of aggression against Ukraine”.

However, Kremlin spokesman Dmitry Peskov said Russia had already made preparations, the state news agency TASS reported.

“We will not accept this cap,” RIA news agency quoted him as saying.

In comments published on Telegram, Russia’s US embassy criticised what it called the “dangerous” move and said Russia would continue to find buyers for its oil.

“Steps like these will inevitably result in increasing uncertainty and imposing higher costs for raw materials’ consumers,” it said.

“Regardless of the current flirtations with the dangerous and illegitimate instrument, we are confident that Russian oil will continue to be in demand.”

Russia has repeatedly said it will not supply oil to countries that implement the cap — a stance reaffirmed by Mikhail Ulyanov, Russia’s ambassador to international organisations in Vienna, in posts on social media on Saturday.

The G7 price cap will allow non-EU countries to continue importing seaborne Russian crude.

Russia has pivoted to China and India which are the largest single buyers of their crude oil.

The oil cap is a key step as Western sanctions aim to reorder the global oil market, prevent price spikes and starve President Vladimir Putin of funding for his war in Ukraine.

Australia agrees to price cap on Russian oil

War on cost-of-living

Australia’s Treasurer Jim Chalmers said the G7 agreement would help support stability in global energy markets and ease pressure on prices.

Australia is aligned to the G7 but not a member.

“Russia’s invasion of Ukraine has forced up global energy prices and wrought havoc on global energy markets,” Dr Chalmers said on Saturday.

“We’ll do what we responsibly can to limit the impact of cost-of-living pressures exacerbated by Russian aggression in Ukraine.”

While the cap would not completely address the impact of Russia’s “war on global energy prices”, Dr Chalmers said Australia would continue to work with the G7 and hold the Putin regime accountable.

Foreign Minister Penny Wong said the price cap was “part of a comprehensive package of measures and sanctions designed to hurt Russia financially and limit its ability to fund its reign of terror”.

US Treasury Secretary Janet Yellen said it was hoped Mr Putin’s “primary source of revenue for his illegal war” would be restricted along with the stability of international energy supplies.

Ms Yellen said the cap would particularly benefit low- and medium-income countries that have borne the brunt of high energy and food prices.

“With Russia’s economy already contracting and its budget increasingly stretched thin, the price cap will immediately cut into (President Vladimir) Putin’s most important source of revenue,” Ms Yellen said in a statement.

Russia and the US both said this week they were open to talks in principle.

But US President Joe Biden said he would talk to Mr Putin only if the Kremlin chief showed he was interested in ending the war.

Ukraine said negotiations were possible only if Russia stopped attacking and pulled out its troops.

On February 8, just weeks before Russia’s invasion, Mr Putin said Russia’s three main three security demands were no more NATO enlargement; no missile deployments near its borders; and a scaling back of NATO’s military infrastructure in Europe to 1997 levels.

The US said at the time that the Russian demands were “non-starters”.

-with AAP

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