The G7 group of leading Western economies reached an agreement on Tuesday to set a price cap on Russian oil exports.
The details of the agreement have not been revealed. However, according to reports, the US suggested lifting sanctions on insurance for ships that transport Russian oil only if countries agreed to buy it at a settled maximum price, thus enforcing a price cap.
G7 member states also rejected the idea of a worldwide price cap on oil prices, proposed by French President Emmanuel Macron on Monday. The proposal was reportedly waived by the US and Germany. France later agreed to withdraw the proposal.
The agreement comes as Western countries are trying to deal with rising energy prices and inflation as a result of their sanctions and embargoes on Russian oil.
The idea of a price cap was first introduced by US Treasury Secretary Janet Yellen earlier this year, and then taken up by the G7, which has reportedly been holding "constructive" talks on the matter over the past three days, at its annual summit in Germany.