JPMorgan warns that global oil prices could reach $380 a barrel due to US and European sanctions on Russia leading to retaliatory cuts in crude production.
According to Arab Net, the Group of Seven countries is working on a complex mechanism to set a price ceiling for Russian oil, in an attempt to tighten the screws on the war machine led by Russian President Vladimir Putin in Ukraine, according to Bloomberg and Al-Arabiya.net.
JP Morgan analysts said that given Moscow's strong financial position, Russia could cut daily crude oil production by 5 million barrels without excessively hurting the economy.
However, for most of the rest of the world, the results can be disastrous.
Analysts wrote that a daily supply cut of 3 million barrels would push the price of benchmark London crude to $190, while a worst-case scenario of 5 million could mean $380 for the crude.
Analysts added: The most obvious and likely risk with a price cap is that Russia may choose not to export its production and instead retaliate by reducing exports.
Analysts say it is likely that the government could retaliate by cutting production as a way to harm the West.
