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Oil prices jump on Putin’s partial military mobilization announcement

Yahoo Finance's Ines Ferré and Akiko Fujita discuss the move in energy markets Wednesday following Russian President Putin's escalation of the war against Ukraine.

Video Transcript

AKIKO FUJITA: Another headline that's shaking up the markets today, Russian President Vladimir Putin ordering the partial mobilization of military reservists in the country. Now, the announcement came just one day after Russia-controlled areas of Ukraine announced plans to hold referendums to become a permanent part of Russia.

Oil prices initially jumped on the news. But take a look at where they are right now. WTI crude down about 6/10 of a percent. Brent crude down about half a percentage point. And of course, we saw that big jump initially, Ines, because this really does add to the jitters that a lot of people have been feeling about where things move from here in terms of what's happening with Russia and Ukraine.

Energy the big question mark, whether, in fact, Vladimir Putin does sort of weaponize oil and gas, as he increasingly, if you look at the recent moves that we've seen on the battlefield, he's increasingly being pushed into a corner when you think about Ukraine's gains.

INES FERRE: Yes, completely. And it's really an economic war in Europe. That's what we have heard so many analysts also talk about. But it's interesting what happened with those oil prices as you mentioned. We saw that bump initially. And now we've seen oil retreating slightly.

Also the US dollar is at multi-decade high. So that is putting a lid also on oil prices as well. But look, WTI is trading around $83 a barrel. I've spoken to analysts that are saying that you can expect to see it between a range of around 80 to 100 going forward. This energy crisis is not abating any time soon.

AKIKO FUJITA: Yeah. And to sort hammer home the point about how jittery things are, especially over in Europe, we saw the German government today agreed to the nationalization of one of its utility companies, Uniper, a major importer of natural gas, which by the way, the company already received a bailout earlier this year. Now the German government essentially buying up almost 100%, about 98% right now.

But that points to all the contingency plans, if you will, that are kind of being shored up right now in anticipation of a further squeeze on natural gas for a country that has been very reliant on imports from Russia.

INES FERRE: Yes. And different European countries are proposing different measures. And there's been proposals for levies on energy companies, price caps, all sorts of measures to try and tame this energy crisis that's happening right now.