- Tension has subsided in the oil markets after Belarus’s Lukashenko brokered a peace deal between Yevgeny Progozhin and President Vladimir Putin.
- Pregozhin had attempted to overthrow Putin over claims that the Russian Military had killed his Wagner paramilitary soldiers but aborted the mission after 24 hours only.
- The oil markets had feared that any disruption in Russia would impact the global supply chain as resources get focussed on another ware other than oil production.
Oil markets have calmed down due to the brokerage of the peace deal between rebel Yevgeny Prigozhin, the head of the Wagner group, and President Putin. Prigozhin had led his army of mercenaries to the Russian capital in an attempt to eject President Putin for alleged attacks on his men.
Hope in sight for oil markets after Belarus brokers Russia peace deal
Oil markets have settled after prices started to hike following the news that a civil war could have impacted Russia. The oil markets are now calm as investors are promised that Prigozhin will no longer attempt a coup against Putin after a peace deal was brokered by President Lukashenko, who will oversee Prigozhin being transferred to the country.
Russia is a major oil producer, making further constraints like a civil war enough to impact the global supply chain. As such, investors watched warily as the coup attempt began on Saturday, which could have ended Putin’s 23 years of power.
The Wagner Group paramilitary had taken control of Rostov, where several major oil and gas pipelines intersect, before the coup attempt was called off. This act held the oil markets, hostage, as any disruption in the country would have greatly reduced the global oil output.
West Texas Intermediate futures were up marginally by about 0.22% in afternoon trade in Asia, initially rising as much as 1.3% to just below $70 a barrel earlier Monday, followed by last week’s almost 4% decline.
Brent crude was trading about 0.3% higher at midday in Asia.
“If it had led to disruption in oil supplies from the Russian state, I think what you would have seen is a disruption which could have been anything from a couple of million barrels all the way up to 3.5-4 million barrels,” said Standard Chartered’s Alok Sinha told CNBC.
“Now that kind of disruption even if it’s short term could have really roiled the markets really badly,” he added.
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