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The G-7 Goes for Russia’s Gold—and Oil Profits

The group of wealthy nations announced a rebranded infrastructure initiative amid more plans to stifle Russia’s economy.

By , the newsletter writer at Foreign Policy.
G-7 leaders pose for a group photo.
G-7 leaders pose for a group photo.
G-7 leaders pose for a group photo on the first day of the three-day G-7 summit at Schloss Elmau near Garmisch-Partenkirchen, Germany, on June 26. Stefan Rousseau/Pool/Getty Images

Welcome to today’s Morning Brief, looking at the G-7 summit; Russian airstrikes on Kyiv, Ukraine; and the world this week.

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G-7 Enters Second Day

Welcome to today’s Morning Brief, looking at the G-7 summit; Russian airstrikes on Kyiv, Ukraine; and the world this week.

If you would like to receive Morning Brief in your inbox every weekday, please sign up here.


G-7 Enters Second Day

G-7 leaders are expected to continue deliberations on support for Ukraine today at their summit in Germany, after the group made further strides in its attempts to constrain Russia on Sunday.

Today’s gathering will include the leaders of Argentina, India, Indonesia, Senegal, and South Africa. Ukrainian President Volodymyr Zelensky is scheduled to join the gathering virtually.

Heres whats happened so far at the summit:

Golden handcuffs. Four G-7 nations—Canada, Japan, the United Kingdom, and the United States—agreed to ban the import of newly mined or refined Russian gold on Sunday. British Prime Minister Boris Johnson hailed the move as a way to “directly hit Russian oligarchs and strike at the heart of [Russian President Vladimir] Putin’s war machine.” The decision is largely dependent on the United Kingdom, which was the destination for roughly 90 percent of Russian gold in 2019.

It’s not clear how much Russia will miss the revenue. Russia’s gold exports brought in roughly $15 billion in 2021 (or about 6 percent of what it made in oil and gas revenues that year).

Build Back Better is … back. But don’t call it that. G-7 leaders announced a revival of the Build Back Better World initiative, a program aimed at countering China’s infrastructure investments through its Belt and Road Initiative. The rebranded Partnership for Global Infrastructure and Investment plans to raise $600 billion for investments in low- and middle-income countries, with $200 billion to come directly from the United States. How exactly that money will materialize is not yet clear, but the White House said it would include a mix of “grants, federal financing, and leveraging private sector investments.”

What’s up next? Today, leaders are expected to have discussions on health and food security as well as hold talks on climate and how to deal with Russia’s oil profits.

The new oil cartel. The leaders will continue talks regarding a price cap on Russian oil (and possibly gas), a move aimed at cutting into Russia’s revenues. With Russia easily finding new buyers outside the Western alliance, enlisting countries outside the G-7 will be crucial to its success. The plan aims to leverage the power of European and U.S. insurance providers to force transporters to abide by the price ceiling.

Climate questions. Fatih Birol, head of the International Energy Agency, speaks with leaders today. His organization has warned that the world must end funding for new oil, gas, and coal projects now to avoid the catastrophic effects of global warming. Germany is pushing to do the opposite and is urging fellow members to reverse a decision to ban public investment on overseas fossil fuel investments by the end of the year, a commitment the G-7 made as recently as May.


The World This Week

Monday, June 27: The 2022 U.N. Ocean Conference begins in Lisbon. U.S. climate envoy John Kerry leads the U.S. delegation.

Tuesday, June 28: U.S. President Joe Biden meets with Spanish Prime Minister Pedro Sánchez in Madrid.

The G-7 summit officially concludes.

The NATO leaders summit officially begins in Madrid.

Indian Prime Minister Narendra Modi visits the United Arab Emirates.

Wednesday, June 29: Leaders meetings take place at the NATO summit.

Turkmenistans president, Serdar Berdimuhamedov, hosts the Caspian Summit in Ashgabat, Turkmenistan. Putin is expected to attend in person.

Thursday, June 30: The inauguration of Philippine President-elect Ferdinand Marcos Jr. takes place in Manila.

Indonesian President Joko Widodo is expected to meet with Putin in Moscow.

OPEC+ oil ministers hold their monthly meeting.

The NATO summit concludes.


What We’re Following Today

Russian missiles hit Kyiv. The Ukrainian capital, Kyiv, was struck with a fresh barrage of Russian missiles on Sunday. Ukrainian officials said an apartment building as well as a kindergarten were among the buildings hit, with the strikes killing at least one person and leaving at least six people injured. Ukrainian Air Force spokesperson Yurii Ihnat said Russia had launched long-range bombing raids using Belarus’s airspace for the first time.

The strikes came a day after Russian forces took full control of the strategic city of Severodonetsk, a victory that puts almost the entire Luhansk region in Russian hands.

Ecuador’s protests. Ecuador’s oil production capability is close to a complete shutdown, its energy ministry said on Sunday, as protests block operations in South America’s fifth-largest oil producer. Two weeks of protests led by Indigenous rights groups have already decreased production by 50 percent.

The Confederation of Indigenous Nationalities of Ecuador, the largest group behind the protests, is calling for increased fuel subsidies as well as a moratorium on new drilling and mining projects. The unrest has put Ecuadorian President Guillermo Lasso under increasing pressure, and he currently faces an impeachment vote in the National Assembly.


Keep an Eye On

Iran deal talks back on. International talks to revive the 2015 Iran nuclear deal are expected to resume this week, with negotiators likely to swap Austria for Qatar as a new venue. The news comes after European Union foreign-policy chief Josep Borrell visited Tehran over the weekend.

Reuters quotes a European and Iranian official as saying “two issues, including one on sanctions, remained to be resolved.” It is unclear whether a key issue—the U.S. designation of Iran’s Islamic Revolutionary Guard Corps (IRGC) as a terrorist organization—has been resolved. The United States appeared to give some ground on Thursday, when U.S. immigration services lifted a ban on U.S. travel for Iranians who had spent time in the IRGC as part of compulsory military service.

Kadhimi’s shuttle diplomacy. Iraqi Prime Minister Mustafa al-Kadhimi visited both Iran and Saudi Arabia over the weekend as he sought to revive talks between the two Middle East powers, the last round of which took place in April. Kadhimi’s peace push comes as news broke over the weekend regarding a brewing Israeli-Arab military partnership to counter Iran. As the Wall Street Journal reports, the United States convened military leaders from Israel, Saudi Arabia, Qatar, Jordan, Egypt, the UAE, and Bahrain in March to discuss defense cooperation.

Mali’s transition. Mali’s military junta took a step toward holding democratic elections by signing a law on Saturday that would allow its members to run for office in future elections, likely to take place in 2024. The decision is unlikely to assuage the Economic Community of West African States (ECOWAS), which imposed sanctions on Mali following its 2020 coup. ECOWAS has been pushing Malian authorities to shorten the period before elections to 16 months at most.

Colm Quinn is the newsletter writer at Foreign Policy. Twitter: @colmfquinn

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