On Tuesday (June 28) local time, the Group of Seven (G7) summit concluded in Germany.

German Chancellor Scholz said at a press conference that the G7 agreed to set up a "Climate Club" by the end of 2022 to coordinate the actions of countries to tackle climate change and achieve climate neutrality by 2050.

The Climate Club will be open to all Paris Agreement signatories. Scholz believes this could help eliminate differences between national regulations and the risk of trade conflicts, while also putting pressure on other non-member states to adopt stricter climate protection measures. The G7 communique also showed that leaders pledged to decarbonise the power sector in full or in part by 2035; in coordination with the International Energy Agency, additional measures to slow the surge in oil prices will be explored, and it is welcomed that the EU can discuss with partners to curb the increase in energy prices, including the feasibility of implementing temporary import price caps.

G7 agreed to set price cap on Russian energy imports

G7 leaders talked about the situation of the energy market, and they have agreed to impose price caps on Russian oil and gas imports. Scholz said the plan to set an energy price cap on Russia is ambitious and requires a lot of work.

Previously, some countries believed that this price mechanism may offset the inflationary impact of energy prices to some extent, and also prevent Russia from selling oil at higher prices.

Western sanctions have cut off much of Russia's ties to the global economy since the conflict erupted in February, but the country continues to rely heavily on commodity exports for money, especially as energy prices rise. The International Energy Agency estimates that Russia's oil export earnings rose to about $20 billion in May.

However, market analysts have mixed opinions on this mechanism. "The biggest uncertainty is Russia's reaction," said Tamas Varga, an analyst at oil brokerage PVM. It remains a nightmare for Europe if Russia decides to cut energy exports, leading to continual increase of prices. "

When asked about the G7 proposal to cap Russian gas prices, the Kremlin said Gazprom could demand changes to the terms of the contract if the proposal goes ahead.