Wagner crisis in Russia shakes world markets
Oil prices rose on supply concerns after the Wagner mercenary army staged a mutiny in Russia at the end of the week. Stock markets also found it difficult to find directions while investors were waiting for developments on the issue. Although the Wagner crisis in Russia ended over the weekend, oil prices rose on supply concerns and stock markets fell as the crisis caused concern about stability.
Russian mercenaries launched a rebellion on Saturday, capturing the city of Rostov in the south of the country and advancing towards the capital Moscow to demand the dismissal of the generals who led the war in Ukraine. The private army named Wagner withdrew after reaching an agreement that guaranteed their safety and the deportation of their leader Yevgeny Prigozhin to Belarus.
WORRIES INCREASE, OIL PRICE RISES
However, the events have raised deep doubts about the political stability in Russia. On the first trading day of the markets after the events, Brent crude oil rose 1.1 percent to $ 74.68 per barrel, while U.S. West Texas crude oil rose 1 percent to $ 70 per barrel today. While the markets remained worried due to the pause in the economic recovery after the epidemic in China and the high level of global interest rates, traders also avoided taking new positions due to the developments in Russia.
UNCERTAINTY GROWING IN THE MARKETS
Experts noted that the short-lived uprising raised serious question marks about the political outlook in Russia. Strategists said the immediate impact of the events in Russia, one of the world’s largest suppliers, on crude oil production kept its position. Goldman Sachs analysts, on the other hand, noted that the global oil market was facing new risks due to the events in Russia. “The risk of lower supply at some point could put upward pressure on prices,” the analysts wrote in a note yesterday.
GOLD RISES, ASIAN STOCK MARKETS DECLINE
On the other hand, the increase in geopolitical risks made its impact felt in the markets. Gold and the yen recorded slight increases today after the revolt.
Gold rose 0.2 per cent to US$1925 an ounce, while the yen traded at 143.4, up 0.2 per cent against the dollar.
The MSCI index tracking Asia-Pacific stock markets outside Japan fell 0.12 percent, while Japan’s Nikkei index fell 0.17 percent.
While the markets remained worried due to the pause in the economic recovery after the epidemic in China and the high level of global interest rates, traders also avoided taking new positions due to the developments in Russia.
WHEAT PRICES RISE SHARPLY
These events in Russia, one of the largest grain producers in the world, have also affected wheat prices. Wheat future contracts in Chicago climbed as market actors included the crisis in Russia in their pricing, rising by as much as 1.3 percent to $ 7.5625 per bushel.
Russia is expected to be the world’s largest wheat exporter this season and next season, so any disruption to Russia’s shipments is expected to have a significant impact.
