Oil prices could more than triple if Russia decides to cut output

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Analysts at JPMorgan Chase said the price of a barrel of oil could more than triple if Russia decides to cut production at record high gas prices.

According to Bloomberg News, JP Morgan’s analysis shows that the current price of a barrel of oil is about $ 110, but if Russia acts to reduce production, it will rise to a “stratified zone” of $ 380 per barrel. There is likely to be.

“The government is likely to retaliate by reducing output as a way to hurt the West,” analysts said. I have written What they described as the worst scenario. “The tightness of the world oil market is on the Russian side.”

Natasha Kaneva, an analyst at JP Morgan, said Russia’s reduction of 3 million barrels per day would push global prices to $ 190 per barrel. And her worst-case scenario is when Moscow cuts 5 million barrels a day, which could cost $ 380, she added.

Since the start of the Ukrainian conflict on February 24, Western nations have attacked Russia with penalties. However, Russia supplies most of Europe with oil and natural gas. Meanwhile, the United States has blocked all Russian oil exports since March.

Analysts at JP Morgan added that the Kremlin may not work if the West continues to target the Russian oil industry.

“The most obvious risk of price caps is that Russia may not participate and instead may choose to retaliate by reducing exports,” the memo said. according to To Bloomberg.

National averages for 1 gallon of regular gas are currently around $ 4.81 as of Sunday, down about 10 cents from the previous week, according to AAA data.

US response

When asked last week how much Americans should expect to pay high petrol prices, President Joe Biden argued that they would continue to rise as long as the dispute was settled.

Biden told reporters on June 30, “This is an important and important position for the world, unless Russia can actually defeat Ukraine and move beyond Ukraine. This is us. Why is NATO? I told Putin, in fact, if he moved, he would move to strengthen NATO. We will move to strengthen NATO entirely. “

Brian Deese, an economic adviser to the White House, said Americans should pay a lot because “it’s about the future of a liberal world order and we have to stand up.”

Biden also sought to shift responsibility for higher prices to gas stations. I wrote on Twitter as follows. Reduce the price you are charging for your pump to reflect the cost you are paying for your product. And do it now. “

He did not provide an example of how gas stations can “lower prices”. It’s also not clear if he wrote to individual gas station owners, businesses, or individuals who own many franchises.

The next day, Pentagon spokesman John Kirby defended Twitter’s post in a Sunday morning interview with Fox News.

“If everyone works with this, we can reduce the price by at least about $ 1 per gallon,” Kirby said. home. “

Jack phillips

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Jack Phillips is the latest news reporter for The Epoch Times, based in New York.

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