The G7 agreed to tighten sanctions on Russia’s oil and gas income

The G7 has agreed to hit Russia’s energy income harder as leaders prepare new steps against oil and gas sales that help fund Vladimir Putin’s war.

The deal came at talks in Évian-les-Bains, where French President Emmanuel Macron is hosting the group through Wednesday. Ukrainian President Volodymyr Zelenskyy joined talks, while Britain and Canada announced sanctions.

A French diplomat said the countries reached a shared position after the meeting. “Leaders agree to increase pressure on Russia, notably through sanctions on oil and gas,” the diplomat said.

The Middle East had taken much of the attention away from Ukraine. With a longer US-Iran ceasefire close to being signed, the group pressed President Trump to focus on Kyiv.

G7 leaders target Russian energy income as attention returns to Ukraine

Ukraine wants stronger action because Russian troops have struggled to make major gains on the ground. Moscow has answered with more missile and drone attacks.

Kyiv says those strikes have made better air protection urgent, especially against ballistic missiles that can hit cities and infrastructure.

Trump said Monday that Ukraine would return to the top of his list after the Iran talks. “Now that this is finished, we are going to be focusing on that and see if we can get that one done,” he said. He also signaled that Washington could pressure Russian energy exports, but gave no details.

The US has allowed Russian crude and fuel cargoes to travel by sea under temporary waivers. Washington issued those exemptions during the war involving Iran to limit stress in energy markets. The waivers have been renewed before, but the latest period is due to end within days.

French representatives noted that lower oil and gas prices have eased the way towards reaching an agreement because of progress towards a US-Iran peace deal that removed any risks of a supply shock.

This meant that the G7 had more opportunities to introduce harsher export sanctions against Russia without increasing the burden on global energy costs.

In addition, talks about strengthening air defense systems in Ukraine were conducted at the summit. Ukrainian President Volodymyr Zelenskyy requested approval from Washington for launching Patriot interceptor missile production in the country. Patriot missiles are manufactured by the American company Lockheed Martin (NYSE: LMT).

Ukrainian attacks cut Russian output while seaborne crude sales climb

Russia’s oil production fell for a sixth straight month as Ukrainian drones damaged storage, transport, refining, and exports.

OPEC data put crude and condensate production at 9.009 million barrels per day in May, down from 9.38 million barrels per day in November. That equals a loss of about 370,000 barrels per day.

Bloomberg data based on the OPEC figures put Russia roughly 690,000 barrels per day below its OPEC+ target. The gap widened as Ukraine increased attacks on energy sites.

At least 31 strikes hit refineries, pipelines, and export terminals in May. The aforementioned data said that it was the largest monthly number since the war started. Most attacks hit plants that turn crude into fuel, sending refinery runs to their weakest level since 2009.

The damage continued in June. Energy Aspects said processing early in the month dropped to its lowest level in 20 years. Less refining left Russia with more unprocessed crude available for sale abroad.

That extra supply reached buyers after Russia reopened facilities at Baltic and Black Sea ports damaged during Ukrainian attacks this year.

Seaborne crude shipments averaged 3.64 million barrels per day in the four weeks through May 31. They had averaged 3.17 million barrels per day in the four weeks through April 17, when attacks on ports and export links were more severe.

The larger export flow could bring more cash to Russian producers and the middlemen handling them, even while domestic processing remains weak. That is the revenue stream the G7 now wants to squeeze.

Britain said Monday that its new package would go after Russia’s shadow fleet, including ships carrying sanctioned Russian liquefied natural gas.

London also plans action against a military intelligence network tied to a company called Neptune. British officials said the GRU-linked operation was “covertly procuring western technology for Russia’s military.”

Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free.