Crude Oil: Fog of War or Legitimate Supply Issues?

Crude Oil: Fog of War or Legitimate Supply Issues?

Are oil markets 'voting' (their disdain against Russia's activities in Ukraine) or are there legitimate oil supply issues?

Author: Brynne Kelly 2/27/2022

The tension between world powers over the Ukraine situation, which has developed into one of the deepest crises in East-West relations for decades, has been front-and-center for the last few weeks.

One hopeful piece of news over the weekend was the announcement that Ukraine said it would hold talks with Russia at its border with Belarus -- near the Chernobyl exclusion zone -- after a call between President Volodymyr Zelensky and Belarus leader Alexander Lukashenko. "The politicians agreed that the Ukrainian delegation would meet the Russian one without preconditions at the Ukraine-Belarus border, near the Pripyat River," Zelenskiy's office said.

Zelensky has said he will not hold talks with Russia on the territory of Belarus, where some Russian troops were stationed before invading on Ukraine's northern border.

But Kyiv said Lukashenko assured Zelensky that "all planes, helicopters and missiles stationed on Belarus territory will remain on the ground during the travel, negotiations and return of the Ukrainian delegation".

Potential Supply Issues?

Natural Gas

The fighting continued in Kyiv and across Ukraine on Sunday, the fourth day of an invasion ordered by Russian President Vladimir Putin. About a third of Russia’s gas exports to Europe are sent through Ukraine.

In Kharkiv, Russian troops blew up a gas pipeline, which Ukraine’s State Service of Special Communication and Information Protection warned could cause an “environmental catastrophe.” The authorities urged residents to cover their windows with damp cloth or gauze.