Finance Ministers from Canada, France, Germany, Italy, Japan, the UK and the US agreed the plan, which covers the seaborne import of Russian crude oil and petroleum products, on 2 September.

In a statement, the Ministers said that the initial price cap would be based on a range of technical inputs to be agreed by the countries implementing it and the price level would be revisited as necessary. It is proposed that the cap is introduced within the same timeline as the European Union ‘s sixth sanctions package, starting in December. However, key details of the plan were not outlined in the announcement.

The Ministers also indicated that they would be seeking a broader coalition of oil importing countries to adopt the price cap and invited input into the plan. However, industry observers believe China and India – which sit outside the G7 and are major importers of Russian oil – are unlikely to endorse the plan.

Russia is reported to have stated it will not export to countries that participate in the cap.

Shortly after the G7 statement, Russia’s state-owned Gazprom announced that the Nord Stream 1 pipeline would remain closed after an oil leak was found during a maintenance programme that began on 31 August. 

When capacity through the Nord Stream pipeline was first curtailed earlier this year, the EU accused Russia of ‘energy blackmail’, while the Kremlin maintained continued supply interruptions were the result of maintenance issues and western sanctions. 

Gas prices increased sharply yesterday after the Russian government was reported to have stated the pipeline will remain closed until international sanctions are lifted.

Despite continued disruptions to gas supplies from Russia, the European Union (EU) is reported to have filled more than 80% of its gas storage, well ahead of the 1 November deadline that was set alongside a gas consumption reduction plan announced in late July.

Not all EU countries have underground storage, but of those that do, according to Gas Infrastructure Europe’s (GEI) AGSI+ database, Belgium, the Czech Republic, Denmark, France, Germany, Italy, Poland, Portugal, Spain and Sweden have reached levels above 80%, although the storage capacity varies widely between them.

A further six countries – Austria, Croatia, Hungary, the Netherlands, Romania and Slovakia – have met their intermediate target for 1 September and are on their way to reaching the 80% target. Meanwhile, the Netherlands is expected to soon meet the 80% storage goal.

However, some countries are not doing so well, with Bulgaria and Latvia below their intermediate target for 1 September.

IAEA assesses situation at Ukraine’s Zaporizhzhia nuclear plant 
Meanwhile, the International Atomic Energy Agency (IAEA) has reported on the initial findings of experts it sent to inspect the Zaporizhzhia nuclear power plant (ZNPP) in Ukraine. The facility which has been controlled by Russian forces since March, but is operated by its Ukrainian staff, has come under repeated shelling in recent weeks.

The UN nuclear watchdog noted that the plant has once again lost the connection to its last remaining main external power line, but the facility is continuing to supply electricity to the grid through a reserve line. The same reserve line can also provide back-up power to the nuclear power plant if needed. Only one of the six reactors remains in operation, producing electricity both for cooling and other essential safety functions at the site and for households, factories and others through the grid.

‘The difference between having the IAEA at the site and not having us there is like day and night. I remain gravely concerned about the situation at the Zaporizhzhya nuclear power plant – this hasn’t changed – but the continued presence of the IAEA will be of paramount importance in helping to stabilise the situation,’ commented Director General Rafael Mariano Grossi.

He later stressed to the UN Security Council that that a Nuclear Safety and Security Protection Zone urgently needed to be established at Zaporizhzhya in order to ensure that the physical integrity of the plant is not compromised. Grossi also stressed that the seven indispensable pillars for ensuring nuclear safety and security at Zaporizhzhya must be maintained and detailed the IAEA’s recommendations to address violations of these pillars.