ELMAU, Germany — France has upended talks at the G7 leaders’ summit over a proposal to cap the price of Russian oil by insisting instead on worldwide price controls that would apply to all producers, including the United States, according to two officials monitoring the talks.
The Élysée confirmed that French President Emmanuel Macron is pushing for a worldwide ban, setting the G7 up for a showdown with countries like Saudi Arabia in the OPEC producers’ cartel.
Asked whether France proposed to fix a cap to the price of oil at a global level, an Elysée official said: “Yes, not only on Russian oil. It must take into account all market players.”
G7 leaders had been debating the risky and controversial price-cap plan targeting Russian oil exports, as a way of cutting off revenues that Russian President Vladimir Putin is relying on to finance his war in Ukraine. The idea was originally put forward by U.S. Treasury Secretary Janet Yellen.
However, many officials are skeptical that such a narrowly-targeted price control could be implemented or enforced.
The more ambitious French alternative would cap all oil prices worldwide, and would seem to expand the goal from punishing Russia to also containing a spike in energy costs that is driving global inflation.
From a technical perspective, that might be easier to accomplish but such a far-reaching price control measure is facing opposition from major oil-producing nations, including the U.S.
It was unclear how France planned to force other big oil producers, including members of the OPEC cartel, to limit their prices.
“France considers it essential that the entire international community, buyers and producers, act to ensure that the necessary volumes are put on the market, so as to ease tensions and bring prices down,” the Élysée official said. “We believe that all options deserve to be explored given the stakes, but these are conversations to be held with our partners.”
Even with a focus on Russian oil, some prominent economists were already warning against such a drastic inference in the world’s energy markets.
“This is going to fail,” Adam Posen, president of the Peterson Institute for International Economics, a Washington think tank, said in a statement.
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