Oil prices increased on Monday following a weekend uprising by Russian mercenaries that sparked worries about political unrest in that country and possible effects on oil supplies from one of the biggest producers in the world.
After jumping as high as 1.3% in early Asian trading, the prices of Brent and US West Texas Intermediate crude (WTI) futures both increased by 0.4% on Monday. At 0234 GMT, WTI increased 28 cents reaching $69.44 per barrel, while Brent was trading 27 cents more at $74.12 per barrel.
A conflict between Moscow and the Russian mercenary company Wagner was avoided on Saturday after the armed mercenaries retreated from Rostov in southern Russia as part of an agreement that stopped their quick march to the capital, .
The challenge, nevertheless, has prompted concerns over a potential disruption of the Russian oil supply as well as worries regarding President Vladimir Putin's hold on power.
A statement published late on Sunday by consulting firm Rystad Energy stated that it did not anticipate a large rise in oil prices as a result of the "short-lived event."
The geopolitical risk, however, has grown during Russia's internal unrest, according to Rystad.
According to Helima Croft, an analyst from RBC Capital Markets, there are worries that Putin may impose martial law, which could prohibit workers from turning up at key loading ports and energy facilities and perhaps halt millions of barrels for exports.
She added in a message on Sunday that according to their understanding, the White House took an active role yesterday in contacting important domestic and international manufacturers regarding contingency plans to maintain the market well-supplied if the situation affected Russian supplies.
Markets may be pricing in a somewhat increased likelihood that domestic Russian turbulence causes supply disruptions, according to Goldman Sachs analysts, stating that because the spot fundamentals have not altered, the impact might only be limited.
Both Brent and WTI decreased by about 3.6% last week due to concerns that further interest rate increases by the US Federal Reserve might reduce demand for oil at a time when investors have also been let down by the recovery of China's economy as a result of several months of weaker-than-anticipated consumption, production, and real estate market data.
According to a note from CMC Markets analyst Tina Teng, China's economic expansion has become a nightmare for the commodity markets, especially for oil and industrial metals.