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Oil could hit $380 if Russia cuts output over price cap: JP Morgan

G7 economic powers agreed last week to explore imposing a ban on transporting Russian oil that has been sold above a certain price

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Oil could hit $380 if Russia cuts output over price cap: JP Morgan
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Brent prices could soar to a “stratospheric” $380 a barrel in “the most extreme scenario” of Russia slashing oil production by 5 million barrels per day (bpd) in retaliation to a price cap being considered by the Group of Seven, analysts at JP Morgan said in a note dated July 1.

G7 economic powers agreed last week to explore imposing a ban on transporting Russian oil that has been sold above a certain price, aiming to limit Moscow’s ability to fund its invasion of Ukraine, which Moscow describes as a “special operation”.

“A $50-60 per barrel price cap would likely serve the G7 goals of reducing oil revenues for Russia while assuring barrels continue to flow,” the bank said.

“The most obvious and likely risk” is Russia not cooperating and retaliating by reducing exports of oil, it said, adding that Moscow can cut output by up to 5m bpd “without excessively hurting its economic interes

“Given the high level of stress in the oil market, a cut of 3m bpd could cause global Brent price to jump to $190/bbl, while the worst-case scenario, a 5m bpd cut could drive oil price to a stratospheric $380/bbl,” JP Morgan said.

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

JP Morgan also saw alternative scenarios where China and India do not cooperate with G7 on the price cap, or where Russia fully re-routes exports from the west to the east but loses pricing power.

SOURCE: REUTERS

Regional

Death toll in Hyderabad gas leakage climbs to five

The injured were under treatment at a hospital in Karachi

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Death toll in Hyderabad gas leakage climbs to five

Hyderabad: The death toll from a gas leakage blast at Hyderabad’s Pathan Colony a few days ago climbed to 5 on Thursday.

According to the details, the incident took place a few days ago women forgot to turn off the gas at night and in the morning an explosion occurred when the stove was lit in the kitchen.

The injured were under treatment at a hospital in Karachi. 

Those who lost their lives in the incident were 65-year-old Ratan, 60-year-old Sawatri, their young daughter, and another person.

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Pakistan

COAS General Bajwa arrives in UK

The Army Chief will also call on military leadership of United Kingdom during the visit.

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COAS General Bajwa arrives in UK

London: Chief of Army Staff ( COAS) General Qamar Javed Bajwa reached United Kingdom on an official visit.

During the visit, he will be attending the Passing-out Parade at Royal Military Academy, Sandhust as Chief Guest.

The Army Chief will also call on military leadership of United Kingdom during the visit.

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Pakistan

Pakistan, Denmark sign inter-governmental framework agreement

Interest-free loans will be extended for renewable energy, energy efficiency, and water supply and waste-water treatment sectors

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Pakistan, Denmark sign inter-governmental framework agreement

Islamabad: Minister for Economic Affairs Sardar Ayaz Sadiq has said that Pakistan and Denmark enjoy a friendly and cordial relationship, and there is a lot of potentials to enhance the relationship between both nations.

He was talking to Danish Ambassador, Lis Rosenholm in Islamabad after the signing of an inter-governmental framework agreement to enhance financial cooperation in the energy and water sector.

Under the agreement, interest-free loans will be extended for renewable energy, energy efficiency, and water supply and waste-water treatment sectors.

Sardar Ayaz Sadiq told the ambassador that efforts to revive bilateral economic and development cooperation are underway with Denmark, agreeing to provide budget support to the Government of Pakistan through Inter-Governmental Framework Agreement.  

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