The Group of Seven, to which Australia is aligned but is not a member of, moved to limit the Russian price overnight, shortly after the European Union unanimously decided upon the same measure.

The strategy is viewed as a key step as Western sanctions aim to reorder the global oil market, 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.

"Russia's invasion of Ukraine has forced up global energy prices and wrought havoc on global energy markets," Dr Chalmers said on Saturday.

"We'll do what we responsibly can to limit the impact of cost-of-living pressures exacerbated by Russian aggression in Ukraine."

While the cap would not completely address the impact of Russia's "war on global energy prices", Dr Chalmers said Australia would continue to work with the G7 and hold the Putin regime accountable.

Foreign Minister Penny Wong said the price cap was "part of a comprehensive package of measures and sanctions designed to hurt Russia financially and limit its ability to fund its reign of terror".

US Treasury Secretary Janet Yellen says it's hoped Mr Putin's "primary source of revenue for his illegal war" will be restricted along with the stability of international energy supplies.

Australian Associated Press