The key takeaway from Putin’s announcement is that Russia has stepped up its aggression in maintaining a key focus on the conflict in Ukraine and that presents more relative uncertainty to markets. After having seen what happened with natural gas supplies, there is a risk that we could see that carry over to oil markets as well. After all, the playbook may very well look like this at the end of the day.
In any case, markets are certainly getting a bit angsty with equities taking a bit of a knock while the dollar and yen are running higher against the euro most notably. But oil is also a notable mover today with WTI crude now trading up by 2.6% to $86.42:
From a technical perspective, the latest news is also helping to provide some assistance for buyers as they continue to lean on the weekly trendline support (white line) from the November 2020 and December 2021 lows. That is helping to keep a supportive layer for price before looking towards $80 as the next key line in the sand.
Putin’s announcement may yet be a bit-part relief for oil for the time being but if it does turn out to be a trigger for Russia choosing to weaponise oil as they did with natural gas, it could play out to be a major boon for oil prices in the big picture.