(MENAFN- Trend News Agency)
Global oil prices could reach a“stratospheric” $380 a barrel if
US and European penalties prompt Russia to inflict retaliatory
crude-output cuts, JPMorgan Chase & Co. analysts warned, Trend reports citing
Bloomberg .
The Group of Seven nations are hammering out a complicated
mechanism to cap the price fetched by Russian oil in a bid to
tighten the screws on Vladimir Putin's war machine in Ukraine. But
given Moscow's robust fiscal position, the nation can afford to
slash daily crude production by 5 million barrels without
excessively damaging the economy, JPMorgan analysts including
Natasha Kaneva wrote in a note to clients.
For much of the rest of the world, however, the results could be
disastrous. A 3 million-barrel cut to daily supplies would push
benchmark London crude prices to $190, while the worst-case
scenario of 5 million could mean“stratospheric” $380 crude, the
analysts wrote.
“The most obvious and likely risk with a price cap is that
Russia might choose not to participate and instead retaliate by
reducing exports,” the analysts wrote.“It is likely that the
government could retaliate by cutting output as a way to inflict
pain on the West. The tightness of the global oil market is on
Russia's side.”
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