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While the Kremlin has publicly stated that it won’t be declaring war on Ukraine or announcing a military mobilization on Victory Day on May 9, the markets are jittery heading into the weekend, with speculation that Russian President Vladmir Putin will announce a doomsday scenario that indicates a war not just with Ukraine, but with NATO at large.
Russian Victory Day celebrations are high-level affairs commemorating the Soviet Union’s victory over Nazi Germany in World War II. This year, the celebration is more important than ever for Putin, who is suffering mounting losses in Ukraine, where the objective has shifted to controlling the east and creating a land corridor to Crimea.
When asked on May 4 whether the celebration would be used to declare war on Ukraine, Kremlin spokesperson Dmitry Peskov shrugged off the question as “nonsense”, RFE/RL reported.
Western media headlines are awash with notions that Putin will deliver a doomsday message when he hits the podium on Red Square.
The rhetoric has already been intensifying steadily, with Russian violations of Finnish and Swedish airspace as the two countries consider fast-tracking NATO membership, and with a simulated thermonuclear attack on Ireland aired on Russian public TV.
Against this backdrop, oil markets were threatening to close higher today for the second week in a row, as the threat to global supplies emanating from the Russia-Ukraine war gains momentum against threats to demand from China’s COVID lockdowns.
While oil has been highly volatile, fluctuating back and forth between weak Chinese economic data, which is bearish for oil, and tight global supply amid sanctions and more sanctions, which is bullish for oil–the bulls are winning this week.
If Putin comes out with the high-level fear-mongering rhetoric that Western media is speculating for Victory Day, it could push oil further into bull territory on Monday.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com