JPMorgan Chase & Co. analysts warned that the price of oil may rise to a “stratospheric” $380 per barrel if US and European sanctions lead Russia to reduce its oil supply in retaliation. In an effort to put more pressure on Vladimir Putin’s war machine in Ukraine, the Group of Seven countries is negotiating a complex mechanism to control the price at which Russian oil can be sold.
However, JPMorgan analysts, including Natasha Kaneva, stated in a note to clients that Moscow can afford to reduce daily crude production by 5 million barrels without significantly harming the economy given the country’s strong budgetary situation.
However, the outcomes might be terrible for a large portion of the remainder of the world. According to the analysts, a daily supply reduction of 3 million barrels would cause benchmark London crude prices to rise to $190, while a reduction of 5 million barrels would result in “stratospheric” prices of $380 a barrel.
(With inputs from agencies)
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