A view shows a local oil refinery in Omsk
A view shows a local oil refinery in Omsk, Russia June 6, 2022. Picture taken June 6, 2022.

Finance ministers from the Group of Seven club of wealthy nations will discuss the U.S. Biden administration's proposed price cap on Russian oil when they meet on Friday, the White House said.

"This is the most effective way, we believe, to hit hard at Putin's revenue and doing so will result in not only a drop in Putin's oil revenue, but also global energy prices as well," said White House spokesperson Karine Jean-Pierre at a briefing for reporters on Wednesday.

Despite Russia's oil exports hitting their lowest levels since last August, its export revenue in June increased by $700 million month on month due to higher prices, 40% above last year's average, the International Energy Agency said last month.

Western leaders have proposed addressing that through an oil price cap to limit how much refiners and traders can pay for Russian crude - a move Moscow says it will not abide by and can thwart by shipping oil to states not obeying the price ceiling.

G7 leaders have also considered other alternatives, including blocking the transportation of Russian oil.

The G7 consists of Britain, Canada, France, Germany, Italy, Japan and the United States.

U.S. Treasury Secretary Janet Yellen and Britain's new finance minister Nadhim Zahawi on Wednesday discussed the price cap plan and sustaining Ukraine's economic needs, the Treasury said.

"At a time when Russia's war has resulted in high energy prices globally, I think a price cap is one of the most powerful tools we have to fight inflation by ensuring a stable flow of oil into global markets at lower prices," Yellen said at the start of the meeting, adding that it would reduce revenues that Moscow can use to wage war on Ukraine.

The price cap would rely heavily on denying London-brokered shipping insurance and finance for oil cargoes priced above an undetermined level.

Zahawi told Yellen that he was confident that Western allies could implement an effective cap to reduce Russia's oil revenues and maintain sustainable oil prices.

But its success would require participation by "the broadest possible coalition" of countries, including India, Turkey and South Africa, he added.

Many countries have imposed sanctions on Russia following its invasion of Ukraine, which Moscow calls a "special military operation," but key oil consumers China and India have stepped up imports of discounted Russian barrels to record levels.

Some traders and oil market analysts have expressed doubts a price cap would work as Russia has found ways to ship its oil to Asia without the use of Western ship insurance. Moscow could also stop exports of some oil altogether, leading to a further spike in energy prices.