Natasha Kaneva discusses J.P. Morgan’s baseline view on global oil markets and associated risks. We expect Russian exports will adjust towards other buyers without a serious disruption to its production. This, combined with the 1.2 mbd monthly drawdown of global strategic petroleum reserves and demand beginning to falter amid record-high oil product prices are sufficient to prompt a fragile balance and stabilize the global oil price in the low $100s in 2H22 and high $90s in 2023. Macro risks are becoming more two-sided. A 3 mbd retaliatory reduction in Russian oil exports is a credible threat and if realized will drive Brent crude oil prices to roughly $190/bbl. On the other hand, the impact of substantially lower demand growth under recessionary scenarios would see Brent crude oil price averaging around $90/bbl under a mild recession and $78/bbl under a scenario of a more severe downturn.

Speakers

Natasha Kaneva, Head of Global Oil and Commodities Research

 

This podcast was recorded on July 8, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4141238-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.