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After Russia’s Mutiny, a Key OPEC+ Producer, the Price of Oil Fluctuates

After the dramatic but brief uprising in the largest OPEC+ producer over the weekend, investors considered the possibility of further civil disturbance in Russia. This caused the price of oil to fluctuate.

After both benchmarks pared earlier advances of more than 1%, West Texas Intermediate traded near $69 per barrel while Brent was stable. After the Wagner mercenary group’s leader Yevgeny Prigozhin’s insurrection came to an end, a strange quiet descended upon Moscow. At the same time, the financial markets remained relatively stable.

According to Vandana Hari, the founder of Vanda Insights in Singapore, crude has thus far displayed the normal default response to upheaval or uncertainty in a major producing country. “The supply of gas and oil in Russia shouldn’t be affected.”

Along with Saudi Arabia, Russia is a significant member of the OPEC+ coalition, and any protracted unrest there might have an impact on the world’s oil markets. Trade flows have already been disrupted by the nation’s conflict in Ukraine, with large Asian users like China increasing their imports of Russian energy.

The impact on oil prices following the armed rebellion in Russia may be minimal, according to Goldman Sachs Group Inc., because markets are frequently preoccupied with spot fundamentals that remain unchanged. The danger of additional civil upheaval, according to RBC Capital Markets LLC, “must be factored into our oil analysis.”

Due in part to Russia’s tenacious exports, aggressive monetary tightening by the US Federal Reserve, and a sluggish economic rebound in China, oil prices in New York are still down almost 13% this year. The bond market in Europe is likewise seeing recessionary warnings.

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