Crude Oil Price Could Hit $380 Per Barrel - JP Morgan Chase
If the Western world caps the price of crude oil for Russia (i.e. amount it can sell its oil produce), Russia may decide simply not to pump and sell oil and if that happens, the price of oil may hit $380 per barrel, according to JP Morgan Chase analysts: “The most obvious and likely risk with a price cap is that Russia might choose not to participate and instead retaliate by reducing exports,” the analysts wrote. “It is likely that the government could retaliate by cutting output as a way to inflict pain on the West. The tightness of the global oil market is on Russia’s side.”
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.
Russia comments: 'Tokyo’s proposal to place a cap on Russian oil prices would lead to significantly less oil on the market and could drastically push oil prices higher, former Russian president Dmitry Medvedev warned on Tuesday.
Responding to the idea put forward by Japanese Prime Minister Fumio Kishida on Sunday, Medvedev wrote on his Telegram channel that Japan “would have neither oil nor gas from Russia, as well as no participation in the Sakhalin-2 LNG project” if Tokyo decided to go through with the proposal.
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“Japanese PM Kishida recently blurted out that the price ceiling for Russian oil would be set at half its current price. Plus, a mechanism will be created that will not allow the purchase of our oil at a price higher than the established one,” the former president wrote.'