Oil field
Oil fieldiStock

The G7 countries reached an agreement on Thursday to place a price cap on Russian oil.

The move would decrease Moscow’s financial ability to pay for the ongoing Ukraine war while not impacting worldwide inflation, CNN reported.

The ban concerns "services which enable maritime transportation of Russian-origin crude oil and petroleum products globally" beyond the price cap, according to the finance minister of G7 countries, including the United States, Japan, Canada, Germany, France, Italy and the United Kingdom.

The ban would likely extent to insurance and financing for oil shipments.

The maximum price cap will be decided by a "a broad coalition" of nations, the seven finance ministers said in a joint statement.

"The price cap is specifically designed to reduce Russian revenues and Russia's ability to fund its war of aggression whilst limiting the impact of Russia ́s war on global energy prices, particularly for low and middle-income countries," the statement added.

On Thursday Russia threatened to respond by banning oil exports to any country that participates in the measure.

"We will simply not supply oil and petroleum products to such companies or states that impose restrictions, as we will not work non-competitively," said Deputy Prime Minister Alexander Novak, according to Russian state news service TASS.

Russia has already been sanctioned by the West for its invasion of Ukraine, including on energy exports.

But Moscow is still making billions of dollars per month exporting its energy products to Asia.

The price cap has been a policy the Biden administration has long called for. The White House has urged its implementation, saying that it will hurt Moscow’s ability to fund the war in Ukraine while allowing Russian oil to continue to be exported, thereby avoiding additional worldwide inflation.