EU To Impose Full Embargo On Russian Oil Next Week, Will Send Price Above $185 According To JPMorgan
TUESDAY, APR 19, 2022 - 01:13 PM
Update (13:15 ET): What was largely a theoretical modeling exercise until moments ago, is set to go live because Reuters reports that the EU is set to declare a full embargo on Russian oil after this weekend's French election:
EU GAS PRICE TO SHOOT UP AS EU TO DECLARE EMBARGO ON RUSSIAN OIL AFTER FRENCH ELECTION NEXT WEEK - SOURCE
Why wait until after the election to launch the embargo? Simple: Europe's bureaucrats are correctly terrified that the coming oil price spike to push the vote in Le Pen's favor, which is why Europe will wait until after the election (when Macron will supposedly be the next president of France, as Belgium hopes) to announce it publicly.
New Flash: JPMorgan says Brent could go to $185
New Flash: JPMorgan says Brent could go to $185
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: New Flash: JPMorgan says Brent could go to $185
JPM now estimates that Russian production shut-ins will amount to 1.5 mbd in April, vs its initial forecast of 2 mbd (the forecast of a 1 mbd loss of Russian exports for the rest of the year remains unchanged for now).
Underlying JPM's projection is the assumption that European buyers will cut their purchases of Russian oil by about 2.0-2.5 mbd by the end of the year and that Russia will be able to re-route only about 1 mbd out of that.
The three ways JPM gets to its 2.0-2.5 mbd estimate are:
1. Russian crude spot contracts account for about 1.8 mbd of total exports, while about 0.3 mbd of products are sold on spot terms, giving us a likely disruption of 2.1 mbd,
2. As of today, nine European countries plus the US, Canada and the UK have committed to cut their imports of Russian oil by ~2.1 mbd,
3. 26 major European refiners and trading companies have suspended spot purchases or intend to phase out 2.1 mbd of Russian imports.
Underlying JPM's projection is the assumption that European buyers will cut their purchases of Russian oil by about 2.0-2.5 mbd by the end of the year and that Russia will be able to re-route only about 1 mbd out of that.
The three ways JPM gets to its 2.0-2.5 mbd estimate are:
1. Russian crude spot contracts account for about 1.8 mbd of total exports, while about 0.3 mbd of products are sold on spot terms, giving us a likely disruption of 2.1 mbd,
2. As of today, nine European countries plus the US, Canada and the UK have committed to cut their imports of Russian oil by ~2.1 mbd,
3. 26 major European refiners and trading companies have suspended spot purchases or intend to phase out 2.1 mbd of Russian imports.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group