LEADERS from the Group of Seven (G-7) nations are discussing the viability of a price cap on Russian oil as talks in the Bavarian Alps again focus on Ukraine. President Volodymyr Zelenskiy joined the summit by video link from Kyiv, and said he wants the war to be over by the end of the year, said officials familiar with his remarks.

On the second day of their meeting at Schloss Elmau, leaders adopted a declaration pledging support for Ukraine. A draft version seen earlier by Bloomberg included a commitment to provide support to Zelenskiy and his government “for as long as it takes”. US President Joe Biden is set to announce the purchase of an advanced surface-to-air missile defence system to help protect Ukrainian cities.

Later in the day, leaders of the club of rich nations will address topics including food security, with the world facing a threat of widespread famine due to stocks stranded in Ukraine, one of the world’s biggest grain exporters. Counterparts from India, Indonesia, Argentina, South Africa and Senegal are joining the discussions.

Zelenskiy addressed each of the leaders individually with a specific comment, according to the officials, who asked not to be identified by name. He requested support on flight defence systems, security and financing for reconstruction, as well as help on unblocking exports of the country’s grain.

The G-7 is expected to reach an agreement for member states to develop and discuss ways to set a cap on the price of Russian oil, according to a senior Biden administration official. The group plans to direct relevant ministers to work with other governments and private-sector companies to come up with a mechanism that focuses on transportation of Russian oil to foreign markets. Right now, it remains an idea, and the discussion will centre around its viability. The discussions will happen over the coming days and weeks, and there is no set date to establish a cap, the official said.

Negotiators — especially those from the US and Italy — have sought to broker an agreement on a Russian oil price cap in order to curb revenues from the commodity that the Kremlin uses to fund its war in Ukraine, while ensuring the oil’s availability to large buyers, like China and India, in order to avoid further price shocks.

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US Treasury Department officials have been discussing in recent days a proposal championed by Simon Johnson, an MIT professor and former chief economist at the International Monetary Fund (IMF), that would seek to cap the price of Russian oil by permitting some trade in the commodity supervised by Treasury’s Office of Foreign Assets Control and its UK and European counterparts. The scheme would allow banks and other firms to finance the trade, provided they regularly certify to regulators that the oil was not sold above an agreed upon price.

There is a lot of skepticism about how something like this could work.

The impending US announcement of the purchase of NASAMS, an advanced medium- to long-range, surface-to-air missile defence system, comes as Biden and G-7 allies prepare to meet virtually with Zelenskiy. Ukraine is the target of missile attacks and can only fend off a fraction of incoming rockets. Questions remain on how quickly the government in Kyiv can get the defence systems, how many will come, and how long will it take to train people to use them. BLOOMBERG