TELFS, Austria — Leaders of the Group of 7 nations said Sunday they would stop buying gold from Moscow and discussed a new American proposal to undercut its oil revenues, even as Russian forces rained missiles on Kyiv for the first time in weeks. The dueling escalation underscored how the war in Ukraine has consumed global politics and the world economy.
President Biden and the British government said members of the Group of 7 — Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — would move on Tuesday to ban imports of Russian gold. Representatives for the assembled countries were also negotiating toward an agreement to only buy Russian oil at a steep discount.
American officials see both the gold import ban and the possible oil price cap as ways to undercut key sources of revenue for Moscow’s war effort and further isolate it from the international financial system. Such a push was a theme at the meeting, both publicly and behind the scenes, as leaders sought to project solidarity with Ukraine. On Monday, Ukraine’s president, Volodymyr Zelensky, will address the summit.
As the fighting in Ukraine grinds into its fifth month, the leaders of Group of 7 countries — the world’s wealthiest large democracies — are seeking to maintain unity against Russia in the face of the war’s growing toll on the global economy. Western sanctions intended to create pain for Russia have sent food and energy prices skyrocketing across the world, even as Moscow’s war machine has shown little sign of slowing down.
Russia appeared to be sending a message of defiance to the G7 leaders on Sunday morning, when it unleashed a new round of missiles at an apartment building in Kyiv, killing at least one person. The top three floors of the nine-story building were reported destroyed. Rescuers were able to pull a 7-year-old girl from the rubble, but her father was killed and her mother, a Russian citizen, was injured, the authorities said.
Russia also escalated its use of cruise missiles over the weekend, launching dozens of strikes at targets across the country. Besides the attack in Kyiv, explosions were reported on Sunday in the northeastern city of Kharkiv, and air raid sirens were heard in several other cities.
“It is like a nightmare,” one woman said as she watched the Kyiv apartment building burn. “When will it end?”
At the welcome ceremony for the G7 summit Sunday, Mr. Biden responded succinctly to a reporter who asked about the Russian strike. “It’s more of their barbarism,” he said.
Germany’s chancellor, Olaf Scholz, also condemned the attacks, saying they reflected the “brutal” nature of Russia’s war against Ukraine. He pledged Germany’s solidarity in presenting a united front against Moscow.
Better Understand the Russia-Ukraine War
Before a working lunch meeting, Prime Minister Boris Johnson of Britain and Prime Minister Justin Trudeau of Canada were overheard by reporters mocking Russia’s president, Vladimir V. Putin, joking that they should take their shirts off — a jab at Mr. Putin’s penchant for shirtless horseback riding.
The first step in renewing the group’s solidarity came before the summit formally began, with the announcement of the ban on gold imports from Russia.
Russia is one of the world’s biggest gold producers, and the metal is its second-most valuable export after energy products. Most of those exports go to G7 countries, particularly Britain, through the gold trading hub of London. Russia did nearly $19 billion in gold exports in 2020, almost all of it going to Britain.
The gold sanctions follow extensive steps to cut Russian export revenues.
The United States banned oil and gas from Russia, and Europe will prohibit most Russian oil while reducing gas imports. The United States, the European Union and their allies have also placed sanctions on Russian officials and other members of the elite and imposed punishments on Russian banks, airlines and other companies.
But while Russia’s oil exports have fallen precipitously under the sanctions, its revenues from oil sales have been on the rise, a function of soaring fuel prices. And consumers around the world have faced mounting pain at the gasoline pump. That combination has left G7 leaders looking for ways to both reduce Russian revenues and relieve the energy price pressures that have contributed to high global inflation.
Janet L. Yellen, the American Treasury secretary, has privately been telling foreign leaders that the best way to achieve both goals would be to impose a so-called price cap on Russian oil sales to Europe, effectively allowing Moscow to sell more oil on the world market, but to recoup far less revenue from it.
Leaders have yet to fill in the details on how that approach might function, but it could work in harmony with existing sanctions, because Europe’s export ban is being phased in over several months, but the price cap could come online much more quickly.
Supporters of the idea say it would lead other nations currently buying Russian oil at a discount, like India and China, to demand even lower prices from Moscow.
“The Russians have been quite cynically manipulating gas markets and, to the extent they can, oil markets, so this would be a chance to turn the tables,” said Simon Johnson, an economist at the Massachusetts Institute of Technology who is an adviser to the Russian Tanker Tracking Group.
“There’s no other active idea that I’m aware of that would impact Putin’s revenues from fossil fuels over the next five months,” he said.
Ms. Yellen has told the foreign leaders that such a cap would be the single best thing they could do right now to minimize the chances of a global recession, according to people familiar with the conversations, because it would help to stabilize the global oil market and help mitigate the risks of another price spike.
The plan could prove ineffective, particularly if the price cap is set too low. Russia could refuse to sell at an extreme discount, instead paying to cap wells and limit oil production. India and China could continue to pay more for oil than European nations, delivering more revenues to Mr. Putin.
Some European leaders, including Germany’s, have resisted the idea but appeared to be warming to it at the summit. A Biden administration official told a reporter on Sunday that staff members were continuing to discuss the idea on the sidelines.
Russia was not the only global adversary drawing the leaders’ attention on Sunday. Late in the afternoon, they detailed a plan to invest in infrastructure projects in less-wealthy countries around the world, an initiative meant to counter China’s expanding influence from its Belt-and-Road Initiative.
The announcement came a year after Mr. Biden urged his fellow leaders at a G7 meeting to act boldly to battle China’s growing influence in Latin America, Africa and parts of Europe, and it was a notable departure in tone at a meeting that was largely focused on addressing Russia’s war in Ukraine.
But it was unclear on Sunday whether Mr. Biden and his counterparts would actually deliver anywhere near enough money to match the scale of China’s efforts, which have been underway for years.
Biden administration officials said the effort would seek to mobilize $600 billion across the G7 nations, to help less-wealthy countries finance spending on a wide range of projects for low-carbon energy, child care, advanced telecommunications, water and sewer upgrades, vaccine deployment and more. Mr. Biden said that $200 billion of the commitment would come from the United States.
An administration official told reporters that the program would prioritize investing in projects that could be completed quickly and efficiently — and that meet stringent labor and environmental standards. Officials also sought to cast the new program as far more likely to help emerging economies achieve faster and more sustainable economic growth than Chinese loans that the administration has cast as “debt traps” for poorer countries.
But much of the G7’s promised money announced Sunday is not direct government spending. It is a mix of both public money and private money that has no guarantee of materializing.
Valerie Hopkins contributed reporting from Kyiv, and Melissa Eddy from Berlin.