WASHINGTON (AP) — The Group of Seven nations and Australia joined the European Union on Friday in adopting a $60-per-barrel price cap on Russian oil, a key step as Western sanctions aim to reorder the global oil market to prevent price spikes and starve President Vladimir Putin of funding for his war in Ukraine.

Europe needed to set the discounted price that other nations will pay by Monday, when an EU embargo on Russian oil shipped by sea and a ban on insurance for those supplies take effect.

The price cap, which was led by the G-7 wealthy democracies, aims to prevent a sudden loss of Russian oil to the world that could lead to a new surge in energy prices and further fuel inflation.

Treasury Secretary Janet Yellen said in a statement that the agreement will help restrict Putin’s “primary source of revenue for his illegal war in Ukraine while simultaneously preserving the stability of global energy supplies.”.

“Crippling Russia’s energy revenues is at the core of stopping Russia’s war machine,” Estonian Prime Minister Kaja Kallas said, adding that she was happy the cap was pushed down a few extra dollars from earlier proposals.

Putin has said he would not sell oil under a price cap and would retaliate against nations that implement the measure.

“Since then, obviously oil prices have fallen and global recession is a real thing,” he said.

“The EU agreement on an oil price cap, coordinated with G7 and others, will reduce Russia’s revenues significantly,” said Ursula von der Leyen, president of the European Commission, the EU’s executive arm

“It will help us stabilize global energy prices, benefiting emerging economies around the world.”