JPMorgan analysts have warned that oil prices could jump to $380 a barrel if US and European sanctions push Russia to retaliate by cutting crude oil production.
And Bloomberg said it was because the G-7 countries were working on a complicated mechanism to cap Russian oil prices in an attempt to “tighten the screws” on Moscow.
Bank analysts said that given Moscow’s strong financial position, Russia could cut its daily crude oil production by 5 million barrels without undue damage to its economy, which could be catastrophic for most countries in the world.
The bank’s analysts wrote that a daily supply cut of 3 million barrels would lift London benchmark oil prices to $190, while a 5 million barrel cut in the worst case could push oil prices up to $380.
They added: “The most obvious and likely risk of price capping is that Russia may decide not to export its products, but instead retaliate by reducing its exports.”
Source: Bloomberg agency.