Global oil prices could reach astronomical levels of 380 dollars a barrel if US and European sanctions cause Russia to retaliate with a reduction in crude oil production, writes analyst at JPMorgen Chase & Co.
The G7 proposes mechanisms and sanctions to halt Vladimir Putin’s war in Ukraine. Nevertheless, the analyst points out that Moscow’s strong position allows the country to reduce its production of crude oil by 5 million barrels without doing significant damage to the economy.
“It is likely that Russia will be able to retaliate by reducing sanctions. This is then a tool for transmitting pain to the West “, writes the analyst.
For large parts of the rest of the world, such a reduction could be catastrophic, writes Bloomberg.
The analyst writes that a reduction of 3 million barrels per day could drive London’s crude oil price up to 190 dollars a barrel. The reduction of 5 million barrels per day could mean an astronomical price of 380 dollars a barrel.
–
