ALBAWABA – Oil prices rose Monday in the wake of an aborted revolt by Russian mercenaries over the weekend on concerns over further disruption of the global oil supply chain, news agencies reported.
Brent crude futures were up 0.8 percent, to $74.41 per barrel, by 7:25 a.m. GMT, according to Reuters. Whereas United States (US) West Texas Intermediate (WTI) crude was up 0.6 percent, settling at $69.44 per barrel.
In the Asian market, both crudes gained up to 1.3 percent in early trades.
Russia is a major oil producer and an ally of the Organization of Petroleum Exporting Countries (OPEC). The coalition of OPEC members and non-member oil producers and exporters is often referred to as OPEC+.
For years, US and Western sanctions on Russia have complicated the process of Russian oil exportation.
However, more recently, in the wake of the Russia-Ukraine war, tighter sanctioning has affected Russia’s ability to export oil directly. Russian exporters have been selling through intermediaries, such as India and other countries.
The Russian national currency, the Ruble, also sank on Monday, according to Agence France-Presse (AFP). It slipped to 87 to the dollar, reaching its lowest level since March last year, shortly after Russia's invasion of Ukraine
Over the weekend, mercenary group Wagner launched a revolt against Russian President Vladimir Putin, which was quickly put to bed, with the intervention of Putin’s allies.
Concerns over further turmoil in Russia affecting the supply of Russian oil drove oil prices, according to Bloomberg.
Weak economic data in China and other leading world economies, combined with rising interest rates, have effectively offset production cuts by OPEC+, preventing a strong surge in oil prices.
Nonetheless, the challenge posed by the Wagner group raised questions about Putin’s grip on power.
Consultancy Rystad Energy said in a note late on Sunday that it did not expect to see a significant increase in oil prices as a result of the "short-lived event", Reuters reported.
"We do, however, believe that the geopolitical risk amid internal instability in Russia has increased," Rystad added.
That said, oil prices lost a significant part of the gains from earlier, Bloomberg underscored.
“This weekend’s developments will not be an immediate game changer,” Keshav Lohiya told Bloomberg, founder of consultant Oilytics.
“Russia’s resilient oil production has been a big surprise and one of the significant bearish overhangs in the market,” he underlined
West Texas Intermediate traded near $69 a barrel, while Brent futures were also little changed, according to Bloomberg’s latest on oil prices.
