The G7 countries are getting closer to a decision on a price cap for Russian oil.
Now expert analysts warn that oil prices could rise to levels never seen before if the ceiling is introduced.
It may seem good on paper, but right now it looks like a disaster recipe, says Bjarne Schieldrop, chief analyst for raw materials at SEB, according to Norwegian Dagbladet.
The purpose of a price cap is to stifle revenues from one of the Russian economy’s most important sources of revenue, it was announced in connection with the G7 meeting in Elmau, Germany.
But Bjarne Schieldrop at SEB believes that such a decision could encourage Russia to reduce oil production in order to put pressure on the countries.
– Oil is the sellers ‘market, not the buyers’ market, he says.
The big bank analyst emphasizes that Russia is the world’s largest exporter of oil – and that reserves in the US would fall sharply if production were reduced.
– Before the autumn, a third of the US strategic reserves will be gone. Russia can and will of course say no to the price cap, says Bjarne Schieldrop.
He believes the price of oil could reach over $ 200 a barrel. The highest oil price to date is $ 147.5, which was measured in July 2008.
“A way to inflict pain on the Western world”
A group of analysts from US JP Morgan go even further and set up a worst-case scenario that would involve “stratospheric” $ 390 per barrel of crude oil.
