Can the G7 turn the screws on Putin?

Russia has carried out a deadly missile strike on a Ukrainian shopping centre with more than a thousand people inside, as G7 leaders vow to stand with Ukraine “for as long as it takes.”

At least two people are dead and 20 injured after a salvo of missiles struck the building in the city of Kremenchuk in central Ukraine, causing it to explode. The death toll is expected to rise.

This latest act of barbarity sends a clear message from Vladimir Putin to the world leaders gathered in Bavaria: I’ll continue to do as I please.

The G7 is working to tighten the economic and military vice on the Kremlin while avoiding stoking inflation at home and preventing starvation in the grain-starved global south.

One proposal is to introduce a cap on the price of Russian oil and pipeline gas to starve the Kremlin of vital funds. European countries would simply refuse to pay above an unspecified price for the fuels. The argument goes that the Kremlin would have no alternative market in the short run, so would be forced to sell at that price to avoid a complete loss of revenue.

Yet the trade-offs and disagreements involved in the G7’s response reveal the extent of Russian leverage. Boris Johnson, for instance, wants the group of nations to repurpose land currently used for crop-based biofuels to grow more food instead, with the aim of curbing global food prices. But Joe Biden is keen to protect the lucrative US market for ethanol and biodiesels, as well as the country’s climate change commitments. Whitehouse officials have made it clear the President will block the plan.

And Japan has proposed removing a reference to a “collective goal of at least 50 per cent zero-emission vehicles by 2030” from the G7 joint statement, a sign that it’s prioritising keeping energy prices down over going green.

At the same time, the costs of the war are becoming clearer by the day.

The threat to Europe’s energy security is particularly acute. In a rare joint op-ed over the weekend, the heads of France’s top energy companies – EDF, Engie and Total – urged consumers to start cutting back on their energy usage as countries brace for supply to be restricted further in the coming weeks.

“The effort must be immediate, collective and massive. Every gesture counts,” they wrote. It comes after the French government said it would aim to have gas reserves at full capacity by the autumn.

With around 70 per cent of its electricity coming from home-grown nuclear power, France is in a much better position to weather the storm than some of its neighbours, most notably Germany.

Gas prices in Germany shot up 24 per cent last week after Russian company Gazprom halted gas flows along the Nord Stream 1 pipeline connecting the two countries.

Germany’s top energy regulator said the country can last just two and a half months without Russian gas, and there will be a “difficult” autumn and winter ahead.

And in the UK, National Grid is drawing up a scheme to coax households into rationing their electricity usage at peak times this winter to reduce the risk of blackouts.

While the costs of punishing Putin are racking up, the missile strike in Kremenchuk is a stark reminder of why the West is enduring this hardship in the first place.