�WASHINGTON (Pakistan Point News / Sputnik - 11th October, 2022) The global economy would face another supply shock if oil prices rise further as a result of the proposed price cap on Russian oil or decisions by energy producers, the International Monetary Fund's (IMF) Chief Economist Pierre-Olivier Gourinchas said on Tuesday.
"There is quite a bit of uncertainty about how energy markets are going to evolve in the coming months with both what is happening in terms of the sanctions on one side, and what is happening with energy producers on the other side. That is one of the layers that we had in our adverse scenario," Gourinchas told reporters.
The IMF expects that such developments could "shave off" another 0.5 percent of output levels next year, he added.
On Wednesday, OPEC+ announced that the alliance had agreed to cut oil production by 2 million barrels per day from November and will take production levels agreed for August as a reference point. The move was made in response to uncertainty in global oil market outlooks, in part caused by Western sanctions on Russian energy deliveries and the G7 plans to introduce a price cap on Russian crude. The decision received backlash from the US, which demanded an increase in production to combat rising domestic prices.
