SCHLOSS ELMAU, Germany, June 25 (Reuters) - Leaders of the Group of Seven rich democracies are having "very constructive" discussions on a possible cap on Russian oil imports, a German government source said on Saturday shortly before the start of the G7 summit. "We are on a good path to reach an agreement," the official said.

Sanctions on Russian energy have had the unwanted side-effect of sending energy prices soaring, which has led to Russia earning more from exports even as volumes fall. (Reporting by Sarah Marsh and Andreas Rinke, writing by Thomas Escritt)