Jpmorgan Sees 'Stratospheric' $380 Oil On Worst-Case Russian...| MENAFN.COM

Sunday, 07 August 2022 10:02 GMT

Jpmorgan Sees 'Stratospheric' $380 Oil On Worst-Case Russian Cut


(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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