JP Morgan downgraded its oil demand forecast by 1 million barrels per day this year, citing high prices.
Meanwhile, the bank left unchanged its price forecast for Brent crude at $114 per barrel during the current quarter and $104 per barrel for the year, Reuters reported.
JP Morgan also warned that the loss of an additional one million barrels per day could result in oil prices surging by another $18-$35 a barrel above its price target.
Russia's oil demand has already decreased by 1 million barrels per day and the country could see the loss of another million barrels this month, BP CEO Bernard Looney said earlier this week.
Total oil demand now averages 100 million barrels per day, which is 400,000 barrels per day less than in 2019, the bank said.As soon as the European Commission proposed cutting Russian oil supplies in the next six months and gradually imposing an embargo, Brent and West Texas Intermediate instantly soared to $110 per barrel and $108 per barrel respectively.
Some EU members expressed concerns about this move due to the high reliance on Russian oil.
There are also other opponents of such an embargo.
Bruegel, a Belgian think tank, suggests it might boost Russia's income and harm the EU and the world economy in terms of higher prices.
No matter how the EU chooses to act, European companies will be banned from providing shipping, insurance, brokerage, and financial services to Russian oil producers. The restrictions will come into effect in a month and will have a negative impact on Russian oil supplies to Europe. The sanctions on Russia's maritime industry had a similar effect earlier this year.
