Wagner Group’s Russia takeover sparks increase in Brent crude, WTI oil prices

The short battle between Russia and its mercenaries, the Wagner Group, sparked an increase in the price of Brent crude oil during the weekend.

At the start of the confrontation on Friday, Brent crude was trading around $72.36, but as the confrontation graduated from words to firepower, so did the price of crude appreciate.

Recall that the Wagner Group chief, Yevgeny Prigozhin, declared a “march of justice” seeking the removal of Russian Defence Minister, Sergei Shoigu, and the General Staff Chief Gen. Valery Gerasimov, amid reports that they were calling for the disbandment of Wagner troops.

Prigozhin had also criticised Shoigu and Gerasimov for failing to provide adequate weapons needed in their battle against Ukrainian troops.

The Wagner group, in their protest against Shoigu and Gerasimov, took over one of the Russian cities and also marched towards Moscow before retreating on Saturday, after Belarusian President, Alexander Lukashenko, settled the rift and brokered a deal to end the takeover of cities.

While the Wagner group action weakens Russia in the eyes of the world, it also sparked fear among oil traders, with a projection that Russian President, Vladimir Putin, could announce martial law, which would shut down businesses and prevent workers in oil facilities from attending to demands.

READ ALSO:Wagner group chief, Prigozhin off to Belarus as Russia drops charges

Fear also mounts over loading ports not opening, leading to a drop in exports of oil barrels to the global oil market. Amid this uncertainty over distribution from Russia, Brent crude price rose to $74.05 in the early hours of Monday.

Within the short battle between Wagner Group and the Russian military during the weekend, Brent crude rose by 2.3% according to data from oilprice.

Also, the West Texas Intermediate (WTI) oil, which is crude produced in the United States and also used as a price benchmark by oil markets, rose to $69.27, from Friday’s low of $67.66.

Commenting on the impact of the mercenaries’ protest in Russia, RBC Capital Markets analyst, Helima Croft, said concerns rose over possible martial law declaration by Putin and the US was actively seeking contingency from key domestic and foreign producers.

“It is our understanding that the White House was actively engaged yesterday in reaching out to key domestic and foreign producers about contingency planning to keep the market well supplied if the crisis impacted Russian output,” Croft wrote in a note on Sunday.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now