JP Morgan analysts outline potential retaliation by Russia if the G7 manage to put together a mechanism to cap the price of Russian oil:
- “The most obvious and likely risk with a price cap is that Russia might choose not to participate and instead retaliate by reducing exports."
- “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.”
- A 3 million-barrel output cut to daily supplies would push benchmark London crude prices to $190
- Worst-case scenario of 5 million could mean “stratospheric” $380 crude
Info comes via Bloomberg (gated)