Oil advances after Russian mutiny rocks top OPEC+ producer

(Bloomberg) – Oil soared as investors weighed the fallout from a rebellion in Russia that turned into the biggest threat yet to Vladimir Putin’s nearly quarter-century-long rule of the main OPEC+ producer.

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West Texas Intermediate futures rose to trade near $70 a barrel in Asia after falling nearly 4% last week. Brent crude also rose. An eerie calm has descended on Russia after an uprising by troops loyal to mercenary Yevgeny Prigozhin came to a dramatic end, though the instability may ripple further.

“Russia’s internal military struggle is adding limited pressure on oil prices amid heightened tensions in Moscow,” Rystad Energy Senior Vice President Jorge Leon wrote in a note. “Geopolitical risk amid internal instability in Russia has increased.”

Russia is a key leader in the OPEC+ coalition with Saudi Arabia, and any prolonged unrest in the country could spill over to global oil markets. The country’s war in Ukraine has already upended trade flows, with major consumers in Asia, including China, increasing imports of Russian energy.

Oil in New York is still around 13% lower this year, in part due to resilient exports from Russia, as well as aggressive monetary tightening from the US Federal Reserve and a lackluster economic recovery in China. Recession alarms are also ringing in the European bond market.

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