Energy

Here’s How Putin Could Single-Handedly Crash The Global Economy

(Photo by MIKHAIL METZEL/Sputnik/AFP via Getty Images)

Dylan Housman Healthcare Reporter
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Russia could single-handedly throw the world’s economy into shambles if President Vladimir Putin opts for retaliatory oil output cuts against the West, analysts at JPMorgan Chase warned Friday.

If Putin responds to European energy penalties by cutting crude oil supply, global oil prices could reach a “stratospheric” $380 per barrel, the analysts warned. Sanctions and economic warfare between Russia and the West have already contributed to high levels of inflation and surging gas prices.

Group of 7 leaders are working on a plan to cap the price of Russian oil to further restrain the Kremlin, according to Bloomberg news. However, Russia could cut oil production by five million barrels per day without substantially damaging its own economy, JPMorgan analysts told investors.

That five million barrel cut would lead to $380 per barrel oil prices, JPMorgan estimated. A cut of three million barrels would lead to prices of $190 a barrel. (RELATED: FOSSIL-FUELED FREEDOM: US Overtakes Russia As Europe’s Biggest Gas Supplier)

“The most obvious and likely risk with a price cap is that Russia might chose not to participate and instead retaliate by reducing exports,” the analysts posited. “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.”