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Russian Oil Output To Decline “Modestly” On Price Cap: JP Morgan

OIL

Russian oil production is estimated to decline slower than expected, as the US government stated India and China can continue to buy Russian gas above the oil price cap, according to JP Morgan analysts.

• Analysts expect Russian oil output to drop by 200k-500k b/d, following the introduction of the oil price cap.

• Russian oil "is going to be selling at bargain prices and we're happy to have India get that bargain or Africa or China. It's fine," US Secretary Janet Yellen said in an interview with rtrs.

• Combined Russian, Indian and Chinese fleets would be sufficient to move most of Russia’s oil and products.

• The global oil market is expected to be in a deficit in 4Q22 and the projected surplus in 2023 is now expanded to 0.9mn b/d. Russian crude oil production is expected to stabilize around 10mn b/d in 2H23.

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