JPMorgan warning: the price of crude oil could reach

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Global oil prices could reach a “stratospheric” level of $ 380 a barrel, as Western sanctions imposed on Moscow over the invasion of Ukraine will cause Russia to retaliate by drastically reducing its oil production, warns JPMorgan Chase & analysts Co, in a note to customers and quoted by Bloomberg.

The countries of the Group of Seven (G-7) have agreed to develop a complicated mechanism to limit the price of Russian oil, in an attempt to put economic pressure on Vladimir Putin’s war machine, powered in particular by with the money received in exchange for hydrocarbons. But, warns JPMorgan, given the sufficiently robust financial situation of Moscow, Russia can afford to reduce daily crude oil production by 5 million barrels, without seriously and excessively endangering its economy, the note reads.

On the other hand, for much of the rest of the world, the results of such a decision could be disastrous.

A 3 million barrel reduction in Russia’s daily production could push crude oil benchmarks in London to $ 190, while in the worst case scenario, the disappearance of 5 million barrels of Russian crude oil from the market would could cause “stratospheric” levels of quotations of up to $ 380 a barrel, analysts wrote.

“The most obvious and likely risk of setting a price cap is that Russia will choose not to participate in this arrangement and instead retaliate by reducing exports. A retaliation by the Russian government in this form would put enormous pressure on the global oil market, a situation that would be on Russia’s side, “JPMorgan analysts warned.