Oil could hit $380 if Russia cuts output due to price cap, says JPMorgan

Brent oil prices could rise to a “stratospheric” $380 a barrel in the most extreme scenario where Russia cuts oil production by five million bpd, analysts at JPMorgan said in a statement. a note released on Friday (1st).

The action would be in retaliation for a price ceiling considered by the G7 countries. The group’s economic powers agreed last week to explore a ban on Russian oil that is sold above a certain price, with the aim of limiting Moscow’s ability to finance the Ukrainian War. The country describes the invasion as a special operation.

“A price cap of $50 and $60 a barrel would likely serve the G7’s goals of reducing oil revenues for Russia while ensuring that barrels continue to flow,” he said. said the bank.

The most obvious and likely risk is Russia not cooperating and retaliating with a reduction in oil exports, JPMorgan said, adding that Moscow could cut production by up to five million barrels a day “without unduly harming its economic interest.”

“Given the high level of stress in the oil market, a cut of three million bpd could cause the global price of Brent to jump to US$190 (R$ 1,009) per barrel, while in the worst case scenario, a cut of five million bpd could drive the price of oil to a stratospheric $380 a barrel.”

Russian Deputy Prime Minister Alexander Novak said last week that attempts to limit the price of Russian oil could lead to an imbalance in the market and drive prices higher.