Global oil prices could reach as high as $380 a barrel if US and European sanctions prompt Russia to retaliate with crude output cuts, analysts at JPMorgan Chase & Co warned, Bloomberg reports.

The Group of Seven countries are working out a complex mechanism to cap the price of Russian oil in a bid to challenge Vladimir Putin’s war machine in Ukraine.

But given Moscow’s strong fiscal position, the country can afford to cut crude output by 5 million barrels a day without hurting the economy too much, JPMorgan analysts including Natasha Kaneva wrote in a note to clients.

For most of the rest of the world, however, the results could be disastrous. A cut of 3 million barrels a day in supplies would push benchmark London crude prices to $190, while a worst-case scenario of 5 million could see them hit $380, the analysts wrote.

“The most obvious and likely risk with a price cap is that Russia may choose not to participate and instead retaliate by reducing exports,” the analysts wrote.

“It is possible that the government could retaliate by cutting production as a way to inflict pain on the West. The tightness of the global oil market is on Russia’s side,” they pointed out.