G-7
AND OIL PRICE CAP - INTERNATIONAL
News:
G7 oil price cap helps
cut Russian oil production: US Treasury official
What's
in the news?
●
The G7-led Russian oil price cap has
helped cut Russia's oil production most recently after having slashed Moscow's
oil revenue earlier in the year, a top US Treasury official said.
Key
takeaways:
Price
cap plan:
●
The introduction of a price cap on Russian
oil means countries that sign up to
the policy will only be permitted to purchase Russian oil and petroleum
products that are sold at or below the price cap.
●
The price cap is being designed to limit Russia from profiting
from its war of aggression while limiting the impact on global energy
prices.
●
USA and EU officials have been trying to
convince countries including India, China and Turkey to join the coalition or
to at least support the price cap.
●
As per them, the price cap is in the interests
of all oil buyers from Russia as it will give them leverage to lower purchase
prices.
Go
back to basics:
G7:
●
The G7 nations account for close to 60
percent of global net wealth, 46 percent of global gross domestic product, and
about 770 million people or 10 percent of the world's population.
Origin:
●
The origin of G7 lies in the oil shocks of
1973 and the corresponding financial
crisis.
Members:
●
US, UK, Canada, France, Germany, Italy and
Japan (most developed and the advanced economies of the world).
●
The European Union is also represented
within the G7.
Objectives:
●
To determine the course of multilateral
discourse
●
To shape political responses to global
challenges.
●
To discuss and coordinate solutions to
major global issues, especially in the areas of trade, security, economics, and
climate change.
Features:
●
The G7 is not based on a treaty and has no permanent secretariat or office.
●
The agenda of G7 is set by the presiding
nation.
●
It cannot pass any laws because it is made
up of separate nations with their own democratic processes.
●
However, decisions taken by G7 have global
effects as the member countries are political and economic heavyweights.