G7 leaders to debate ways to stabilise global energy markets

US president Joe Biden expects G7 leaders to debate steps to “stabilise global energy markets” as Washington seeks more co-operation to contain the high commodity prices weighing on the global economy.

A senior Biden administration official told reporters on Wednesday that the US would announce a “concrete set of proposals” to raise economic pressure on Russia over its war in Ukraine, hinting at a possible sanctions package when G7 leaders gather in Germany this weekend.

The US also expects energy, the cost of which has soared since the war began in February as countries scrambled to reduce their dependence on Russian imports, to be “very much at the heart of the discussions”, the official added.

“[We] expect [G7 leaders] to speak to how can we take steps that further reduce Russia’s energy revenues, and do so in a way that stabilises global energy markets and lessens the disruptions and pressures that we’ve seen,” the senior Biden administration official said.

The US has banned the import of Russian energy and supported the EU’s efforts to curb its own dependence on the country’s oil and gas. But American officials are concerned that some of the measures, including an EU ban on insuring Russian oil cargoes, could be counterproductive, leading to sharp price increases that fill Moscow’s coffers and create economic and political spillovers in the west.

The US has been discussing possible solutions with the EU and G7 nations, such as price caps and tariffs on Russian oil, but there has been no agreement on any new measures. Biden has been focused on energy prices domestically, including a call on Wednesday for Congress to suspend petrol taxes for three months.

Biden’s trip to the G7, to be held at Schloss Elmau in the Bavarian Alps, will begin with a bilateral meeting between the US president and Olaf Scholz, the German chancellor and host of the gathering. Volodymyr Zelenskyy, Ukraine’s president, is also expected to speak to the group virtually.

Senior US officials said food security would also be high on the agenda, given price rises and supply chain crunches, as well as enhanced co-operation in the approach to China.

The G7 meeting comes ahead of a Nato summit in Madrid next week, where the transatlantic military alliance is due to endorse a new “strategic concept”, a document outlining its mission that was last updated in 2010. For the first time, the document will address how the alliance views China’s efforts to extend its military reach.

“Russia obviously continues to be the most serious and immediate threat to the alliance, but the strategic concept will also address the multi-faceted and longer-term challenges posed by the [People’s Republic of China] to Euro-Atlantic security,” a senior administration official said.

The Nato summit will include leaders from the Asia-Pacific region for the first time, including from South Korea, Japan, New Zealand and Australia, aimed at highlighting the alliance’s long-term focus on China.

There will also be an announcement on new force commitments “to strengthen Nato’s defence and deterrent posture”, the official said. The US has about 100,000 troops in Europe, up from 70,000 before Russia’s invasion of Ukraine. Nato has 40,000 troops in eastern Europe under its direct command.

Biden administration officials declined to say whether they expected progress on efforts to assuage Turkey’s concerns with Finland and Sweden’s applications to join Nato, but noted that US secretary of state Antony Blinken and national security adviser Jake Sullivan spoke with their Turkish counterparts in recent days to try to make progress.