Title: Oil Soars as Putin Orders Forces to Separatist Areas of Ukraine

Feb 21, 2022 06:54PM ET

By: AnalysisWatch

Russian President Vladimir Putin has announced that he recognises two self-proclaimed separatist republics in eastern Ukraine and plans to send "peacekeepers" to the region, dramatically escalating the conflict.

Early Asian trading extended gains from Monday, when there was no trading due to a U.S. holiday, with no details yet given on how many troops might be sent and when.

Russia has previously accused Ukraine of deploying significant numbers of its own troops to the line of contact with separatists in the Donetsk and Luhansk regions.

While Russia will argue that Putin's recognition of the regions provides a legal basis for the presence of its troops, the move is likely to reinforce U.S. and European fears that Moscow is seeking to seize control of territories internationally recognized as part of Ukraine and bring its forces closer to direct confrontation with Ukrainian soldiers. The conflict could shake commodity markets by disrupting regional trade flows and potentially triggering Western sanctions.

Oil prices also rose on Monday after Saudi Aramco said there were signs of rising demand, particularly in Asia. In addition, several of the largest OPEC+ producers want the group to continue its strategy of adding another 400,000 barrels of oil a day to the market in April, people familiar with the matter said. That's despite OPEC+ calling for faster production increases in the face of supply constraints.