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Economist: G7 Cap on Russian Crude Would Deepen Global Energy Crisis, Force US & EU Into Recession_我的网站

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一 | Analysts at JP Morgan Chase & Co. warned clients this week that global oil prices could reach a “stratospheric” $380 per barrel if Russia decides to slash its crude output in response to the multiple layers of penalties imposed by the US and the EU.,Natasha Kaneva and other JP Morgan analysts highlighted that Russia’s economy could withstand Moscow cutting crude oil production by some 5 million barrels without disrupting its economy.,“The most obvious and likely risk with a price cap is that Russia might choose not to participate and instead retaliate by reducing exports,” the market analysts wrote, as reported by Bloomberg.,Due to much of the world depending on Russia for oil, even cutting production by 3 million barrels could force benchmark London crude prices to swell to $190 per barrel.,“It is likely that the government could retaliate by cutting output as a way to inflict pain on the West,” the memo floated. “The tightness of the global oil market is on Russia’s side.”,Biden Blames 'Putin's Tax' for Rising Food, Gas Prices in US During Speech on Record Inflation10 June, 18:22 GMT,As G7 leaders moved to ban imports of Russian gold in support of Ukraine this week, many experts have begun to weigh in on the practicality, likelihood, and effectiveness of establishing fossil fuel price caps.,Dr. Mamdouh G Salameh, an international oil economist and visiting professor of energy economics at ESCP Europe Business School, has argued that Biden and other Western leaders have “lost all sense of direction” and are on a path to economic despair by continuing to exacerbate the global oil crisis.,“They are letting their enmity cloud their judgment,” Salameh told Sputnik.,"Every time Western nations talk about banning Russian oil or capping it, oil prices surge further forcing Western customers to pay steeper energy bills while [Russian] President [Vladimir] Putin laughs all [the] way to the bank," he added.,Rather than playing by other nations’ so-called rules, Russia could simply nix its exports of crude oil and petroleum products to Western nations and maintain oil sales to China and India, “both of which account for more than 50% of Russia’s crude exports,” according to the economist.,“This will certainly push Brent crude oil prices beyond $140 a barrel, deepen the global energy crisis facing the world and plunge Western economies into damaging recession,” Salameh emphasized.,“Western nations don’t seem to realize how quintessential Russia’s oil exports are to the global oil market. That is why they have avoided so far banning Russian oil exports and are looking for alternative ways of cutting Russia’s oil revenues.”,US Markets Lost up to 30% This Year Amid Soaring Inflation, Fuel Prices, Sanctions Backlash1 July, 16:59 GMT,“Even without any new Western sanctions and more follies, the single most important problem that is adversely impacting global supplies and prices is the ever-shrinking global spare oil production capacity which is running very low,” Salameh said. “This will keep the market on edge and also send crude oil prices in a steep upward trajectory soon.”,The economist pointed out: “The United States currently imports more than 9.1 mbd of crude oil and this could rise to 9.24 mbd before the end of the year. This means that it is more vulnerable to an oil price shock than other major economies.",For his part, Dr Gal Luft, co-director of the US-based Institute for the Analysis of Global Security and a senior adviser to the United States Energy Security Council, believes that JP Morgan's forecast is a "hypothetical scenario", and oil will never come to such price level simply because the "world economy will collapse way earlier.","Even at $159 a barrel we will see massive demand destruction and global depression. The G-7 leaders are behaving like a bunch of drunken sailors on the deck of a ship in the midst of a storm. They are so consumed with rage and vindictiveness that they cannot see the situation clearly and act according to their nations’ self interest. The summer months will face G7 leaders with their voters and they will get an earful. There will be protests and perhaps even violent ones. No democratically elected leader can outsmart the rules of economics," Dr Luft pointed out.。

二 | London, Oct 15 (UNI) Liz Truss is facing a backlash from Conservative MPs after firing her chancellor and announcing a second U-turn on a major economic policy.

Rishi Sunak-backers say "dissatisfaction is so high", however, making place for another PM in quick succession is not something the party can afford.

One former minister told the BBC: "we cannot go on like this indefinitely". However, several of Boris Johnson's supporters would do anything to stop Indian-origin Sunak from taking over.

Another Tory MP said the party was in a "state of despair" after the PM's Downing Street news conference.

Truss supporter Christopher Chope said "time will tell" if she had done enough to secure her position but those plotting to remove her were "hyenas".

Sir Christopher said: "We can't possibly force another prime minister out of office, we've just got to calm down and try to give the prime minister our support."

On Friday, Truss sacked her chancellor, Kwasi Kwarteng, and reversed a key policy to scrap the planned rise in corporation tax from 19 to 25 per cent. The statement marks the second major U-turn on the mini-budget after Truss cancelled her plan to scrap the top rate of income tax earlier this month.

The U-turn on corporation tax is "going to be damaging to the prospects for growth" and is "totally inconsistent" with what she said during the campaign, Sir Christopher said.

Conservative MP for Coalville, Andrew Bridgen, said he thinks "there'll be a challenge to Truss in the next few weeks".

Bridgen, who backed Rishi Sunak to be leader, said: "Dissatisfaction is so high in the parliamentary party.

"Removing Kwasi Kwarteng when he implemented the policies she asked him to do won't engender loyalty to her."

On September 23, Kwarteng unveiled a so-called mini-budget to deliver the prime minister's vision, announcing the biggest package of tax cuts in decades. But the mini-budget spooked financial markets and sparked a revolt among Tory MPs, who urged the prime minister to drop parts of her economic plan to shore up the UK's finances.

Privately many Conservative MPs admit they have gone through despondency and into despair over the past 24 hours, the BBC said.

By going back on her promise to cut taxes she has now alienated some of those who backed her in the leadership contest for her "bold" approach.

It is not hard to find Tory MPs who think her time is up.

One former backer told the BBC, Truss had "appointed her successor," by bringing in Jeremy Hunt as chancellor. "Sadly I think that hastened her demise," the Conservative MP said.

Another MP called Truss's news conference "a mega-disaster". They said: "She will have to resign - she is worse than Corbyn."

Truss insisted she would stay on as prime minister to see through her "mission" to get the economy growing.

"I'm absolutely determined to see through what I promised - to deliver a higher growth, more prosperous United Kingdom to see us through the storm we face," Truss said.

The eight-minute news conference came after a dramatic day in which the prime minister fired Kwarteng after he returned early from a US summit.

Members of Truss's cabinet are not in open revolt. Many allies have been tweeting support for her and the new chancellor, Hunt.

Former chancellor Nadhim Zahawi tweeted: "It's time to get Britain moving. We are determined to grow the economy, eliminate the Covid backlog and protect people from Putin's energy warfare."

In a tweet, Deputy Prime Minister Therese Coffey - a close ally of Truss - said the prime minister was "right to act now to ensure our country's economic stability".

And Business and Energy Secretary Jacob Rees-Mogg tweeted: "As a government, we must now get on and deliver the pro-growth reforms that will lay the foundations for our future prosperity."

The Liberal Democrats and the SNP have called for a general election, while shadow chancellor Rachel Reeves said a new government led by Labour is "what this country needs".

Truss has ruled out a general election until 2024.

Many in the parliamentary Conservative party think they have to avoid another drawn-out leadership contest where Tory members have the final say.

The idea cropping up most is a joint ticket with former chancellor Rishi Sunak and Penny Mordaunt. But after 12 years in power, under four different leaders, there are many old scores to settle in the Tory Party, the BBC said.

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