DANGER AHEAD: RUSSIAN COUP MIGHT CAUSE SURGE IN OIL PRICES

Update on Russian coup:

PMC Wagner is about 2hrs south of Moscow. Putin is reported to have fled to St. Petersburg. There isn’t any military forced that can oppose the mercenary group of Wagner. This is an important thing to remember. This is a criminal recruited mercenary group that was used as cheap blood to fight Russia’s wars in order to obfuscate casualties.

There isn’t a scenario where the turnover of Putin’s government to Prigozhin can be viewed as a positive for market stability. While I do think it’s highly possible PMC Wagner was bought out by NATO to remove Putin, it’s also extremely possible that placing a band of actual murderers and rapists in charge of the largest nuclear arsenal in the world to be a bad mistake.

Best case scenario:

PMC takes over and calls an end to the Ukraine war. I am sure the west is more than willing to permit Russia to spiral into anarchy and genocide in order to win the Ukraine conflict. After Russia falls, so will Belarus and perhaps Chechnya. If this all works out without collateral damage to the west, the west might get its way in breaking up Russia into numerous provinces, effectively neutralizing the Russian state forever.

Worst case:

Putin views the loss of the Russian state as reason to conduct a scorched earth policy and will target western nations with his nuclear arsenal. A Russian civil war will most likely lead to much higher oil and food prices — perhaps causing a reintroduction of hyper inflation and higher rates in the west.

The only way Putin can get out of this is to totally massacre the Wagner forces attacking his administration. Anything short of that proves his weakness and Prigozhin might seize power, perhaps on a temporary basis, and eventually hand it back to someone who is friendly to him. Either way, a Prigozhin regime sounds like a scary Tom Clancy story made from nightmares.