RIYADH: Amid ongoing geopolitical tensions and skyrocketing energy rates, global oil prices may hit $380 a barrel if the US and European curbs compel Russia to inflict retaliatory crude output cuts, Bloomberg reported citing analysts at JPMorgan Chase & Co.
It was after Russia’s invasion of Ukraine that the Western allies led by the US imposed several sanctions, and worked out a complicated mechanism to cap the price fetched by Russian oil.
According to JPMorgan analysts including Natasha Kaneva, currently Russia enjoys a strong financial position and it can afford to slash daily crude production by 5 million barrels.
The analysts noted that Russia’s crude production cuts could be disastrous for the world, as a cut of 3 million barrels will elevate London crude prices to $190. In the worst-case scenario, if the output is cut by 5 million barrels, the price could reach as high as $380 a barrel.
“The most obvious and likely risk with a price cap is that Russia might choose retaliate by reducing exports as a way to inflict pain on the West,” wrote the analysts.