Finance ministers from the G7, including Chancellor of the Exchequer Nadhim Zahawi, have agreed a price cap on Russian crude oil and petroleum products.

The Chancellor has said he believes the move “will curtail Putin’s capacity to fund his war” in Ukraine.

It comes around six months after Vladimir Putin’s Russian army first invaded Ukraine.

In a joint statement, G7 ministers confirmed the price cap, which will be based on a range of technical inputs and will involve a price level which will be revisited as necessary.

The ministers added: “We aim to align implementation with the timeline of related measures within the EU’s sixth sanctions package.”

In a separate statement, Mr Zahawi said further action against Putin was a “personal priority as Chancellor”.

He said: “Since Putin’s brutal and unprovoked invasion of Ukraine, the UK and our allies have imposed hugely damaging sanctions on the Kremlin war machine, pushing the Russian economy into a deep recession and putting the majority of Russia’s 640 billion dollars foreign exchange reserves beyond use.

“Following a productive meeting with Secretary Janet Yellen in Washington, and together with our G7 partners, we have agreed to go further.

“We will curtail Putin’s capacity to fund his war from oil exports by banning services, such as insurance and the provision of finance, to vessels carrying Russian oil above an agreed price cap.

“We are united against this barbaric aggression and will do all we can to support Ukraine as they fight for sovereignty, democracy and freedom.”

Despite declining oil volumes, Russia saw the value of oil sales jump by more than £600 million in June compared with the previous month due to rocketing prices as a result of the war.