Business

Oil jumps after Putin orders partial mobilisation of troops

Benchmark WTI crude rises 3.2%

The Marathon Oil refinery in Garyville, Louisiana. Oil prices surged after Russia ordered a partial mobilisation of troops for Ukraine. Photo: Bloomberg

Wed Sep 21 2022 - 09:32

Oil rallied after Russian president Vladimir Putin ordered a partial mobilisation to hold on to occupied territories in Ukraine, an escalation that could lead to further disruption to energy supplies.

West Texas Intermediate surged toward $87 (€87) a barrel, adding as much as 3.2 per cent. Russia will take necessary steps to defend its sovereignty and will defend territory with all available means, Mr Putin said, as he announced a partial mobilisation of the country’s population.

The move threatened to escalate the conflict further after the Kremlin has moved to stage sham votes on annexing the regions of Ukraine it still controls.

The growing tension comes in advance of a decision by the Federal Reserve on monetary policy later on Wednesday. The central bank is expected to raise interest rates by 75 basis points, and put numbers on the pain it’s been warning of when it publishes new economic projections.

READ MORE

“Supply disruption concerns are supporting oil, said Giovanni Staunovo a commodity analyst at UBS.

Crude is on track for its first quarterly loss in more than two years as concerns over a global economic slowdown weigh on the outlook for energy demand. The Fed decision will be followed by other central banks from Europe to Asia, which are also expected to increase borrowing costs.

Mr Putin’s comments sparked a bid for US treasuries and haven assets including gold. He also hinted at the use of nuclear weapons in the conflict, while defence minister Sergei Shoigu told state TV that 300,000 reservists would be called up under Mr Putin’s order.

Elsewhere, the industry-funded American Petroleum Institute reported US crude stockpiles rose more than 1 million barrels last week, according to people familiar with the figures. Inventories at the key storage hub at Cushing, Oklahoma, and nationwide gasoline supplies both expanded. — Bloomberg

LATEST STORIES