The potential mechanism, according to sources, would only allow the transportation of Russian crude and petroleum products sold below a predetermined threshold. G-7 leaders and officials are holding talks, but no agreement has been reached, they said.
The main topics of discussion at a three-day summit in the Bavarian Alps are President Vladimir Putin's invasion of Ukraine and its economic consequences. In the face of rising inflation and efforts to reduce reliance on Russian oil and gas, the G-7 countries are looking for ways to limit the Kremlin's energy revenue while mitigating the impact on their own economies.
While a mechanism is on the agenda and the concept may be agreed upon in principle, two of the people said it is unclear whether leaders will be able to nail down specific details, such as the level of the price cap, before the summit ends.
President of the European Council Charles Michel confirmed that leaders planned to discuss the proposed cap in depth, but that there were "many challenges" to overcome.
"We are ready to make a decision with our partners, but we want to make sure that whatever we decide has a negative impact on Russia and not on ourselves," Michel told reporters at the summit.
On Saturday, a German government official told reporters that, while the issues at hand were not trivial, the group was on the verge of reaching an agreement. According to a senior Biden administration official, the US is also confident that a solution will be found.
The European Union agreed last month to impose a ban on insurance related to Russian oil transportation, and any attempt to add a waiver would require the support of all 27 member states. Some officials have expressed reservations about reopening that legal text, citing the fact that it took weeks to reach an agreement in the first place. Nonetheless, incorporating a new transportation ban into any mechanism may help to soften opposition to weakening the insurance ban.
A mechanism linked to oil shipment may be more appealing to other buyers of Russian supplies, such as India, which would be able to insure and transport their shipments as long as the price stayed within any agreed-upon threshold. Prime Minister Narendra Modi will also be in attendance at the G-7.