Oil rates may flareup to $380 per barrel if Russia reduces exports

Washington: Leading financial institution JP Morgan Chase warned that the United States and European countries had imposed sanctions against the Russian fuel sector since the Ukraine conflict started. The Russian leadership has repeatedly warned of a strong retaliation against the sanctions. In this scenario, if the Russian leadership decides to cut oil exports, the fuel market will be hit hard and the oil rates will flare up to $380 per barrel.’ The oil rates are currently at the level of $110 per barrel.

It has been more than three months since Russia launched the military campaign in Ukraine. The United States and European countries have imposed harsh sanctions on the Russian economy and other sectors. These also include the oil sector, considered the backbone of the Russian economy. Some of the European countries have stopped fuel gas imports from Russia. The European Union has decided to reduce crude oil imports from Russia by nearly 80% by the end of this year. But the European countries have not been able to impose a blanket ban on Russian fuels.

At the same time, Russia has also stopped fuel supplies to certain countries. Last month, reductions were announced in the gas supplies to leading European countries, including Germany. The Russian action has sent a chill down the spine of the European countries, and some have even resorted to rationing fuel and electricity. Countries like Germany have even resorted to subsidising the rising fuel costs. An appeal has also been made to the population to reduce consumption.

A possibility was being predicted that following fuel gas, Russia could take a similar decision regarding crude oil. Against this very background, the warning issued by the US financial institute JP Morgan Chase becomes significant. Analysts at JP Morgan Chase warned that Russia could soon decide to avoid transactions in the fuel sector or reduce exports. This is the biggest threat to the crude oil rates. Russia can take this decision to rock the western countries. The situation in the crude oil market is currently in favour of Russia.

A few days ago, G-7 had indicated regulating the Russian oil rates. The experts at JP Morgan Chase said that Russia could decide to reduce crude oil exports against this background. Experts pointed out that considering the current situation of the Russian economy, Russia can reduce oil production by nearly 5 million barrels per day. Earlier in April, Russian Deputy Prime Minister Alexander Novak had warned that the crude oil rates could flare up to $300 per barrel.