Destabilization of Russia, not Ukraine, is actually a greater economic risk in the course of this year's concern, not merely OPEC's deflect price increase of today (yes, and Oil sold-off in the wake of the Saudi's saying that), based for the most part on 'demand' destruction, as they can't find another valid reason. I would say there's not been a valid reason for the excess upside calls lately.

For the most part both the Saudi's or Europe's need, and hence dependence on Russia (which I warned of for several years) is likely what's largely behind a multifaceted scenario from here, as numerous geopolitical analysts debate what course Putin might follow (if he is given a choice as contrasted with just 'declaring victory' over the Donbass/East, and going home basically).

That last prospect may very well be something he's considering. To prolong a conflict the way he is so far (even if it's viewed as a 'mistake' within his mind) doesn't have any clear endpoint. The Russian people are struggling too, and even as the Ruble strengthened, Moscow has nowhere to really put money so what can they do 'if' the sanctions persist and limited exports grow expensive.

What Russia can do is: a) solidify the East of Ukraine (with fiction of separate republics), b) tuck their tail and go home, sort of like after Afghanistan or even Georgia (which isn't completely settled even now), c) ratchet up the near-term pain 'even for Russians' by cutting all export of Oil intentionally, thus putting Europe in a deeper pickle ahead of the Fall/Winter increased demand horizon for energy needs, which would d) hike the price of Oil dramatically on world markets, and that would push the West into a deeper Recession with parts of the world entering Depression (they're already in Recession), or e) finally do a ceasefire with Ukraine and workout the details (also requires Kyiv to accept a loss of the East and reluctant continued Russian occupation of Crimea).

For mankind, and the stock market, 'e' would seem to be the calmest solution, even though it's fraught with risks and probably years of regional uncertainty, as is no stranger to people living in the area...or for that matter Eastern Europe for decades until they liberated themselves starting with Poland of course. But 'if' Russia decides to 'double-down' on hostility, and they go with combinations of 'c' resulting or risking 'd', well, that would either bring NATO in decisively to try to permanently silence Russian's imperial ambitions (which they accuse all others of except themselves, and they're the ones with history of suppression) or it would simply push much of the world into the abyss beyond which money printing inflation alone would not resolve. All of this is central to the crisis.

Keep in mind, Russia is almost a Third World country with a First World 'chip' on its shoulder, but armed with nuclear weapons. NATO has finally basically emerged (Germany doing so was a dramatic shift) with reluctant endorsement (probably subconsciously as several members intentionally deferred military modernization and expenditures at the requisite 2% GDP levels). That shuffle both consumes existing military hardware and ammo, but also keeps the MIC going (military industrial complex), which was not a direction many desired.

In theory that NATO strengthening should support Putin taking 'e', backing-off and trying to preserve his personal life not just stature, while if he doesn't then all bets are off with regard to economic stabilization in Europe and the US not just Russia and Ukraine. That's probably the core of JP Morgan's thinking as they speculate about $380 / bbl Oil, which otherwise can't happen without 'd', since demand destruction would collapse global economies long before that.

So we'll see, and I just thought I would try to structure several scenarios about what might be rumbling around as politicians grapple with alternatives beyond what they'd dare talk about in public. It's not that I'm emulating Jeff Bezos, but I agree that the public pronouncements are almost purely unrealistic spin or a bit of naivete (or both). Plus they tend to blame high (domestic) prices for Oil on everything but policy directives that inhibited retaining self-sufficiency on a national scale, by not emphasizing North America production adequately (to say the least and avoid debate about the pipelines and so on).

In-sum: 

More than the focus Wall Street has on the Fed, or the risks (serious as separately often discussed) after the internal meltdown for stocks (about 18 months ongoing interspersed by unsustainable rebounds), you've got 'war' ongoing. So, Russia (by virtue of not exploiting our own production resources in the USA) is in a position to suffer themselves more near-term by hiking Oil, if they are intent on pushing the crisis to a maximum inflection perhaps. They may not do that, but I cannot otherwise think of how Wall Streeters come-up with extraordinary high prices.

If anything lesser occurs, Oil should be toppy in the 120/bbl area, maybe 130. And only fools think EV or alternative energies, of multiple types, are going to be able to offset Oil demand anytime soon. That's the direction but it takes at least years, and current technology (whether batteries at affordable kw levels) or eventually embedded roadways and so on, are incapable of filling the gap. Also incapable is the idea of letting price rise much more as long-commutes in areas like California become impossible. Mass transit infrastructure is a joke or antiquated in the US, and barely acceptable in much of Europe. Who wins from all this? Unfortunately China which in a way contributes to the feasibility of Russia being in conflict with the West, diverting the focus from their own expansionist designs.

Seem a bit like the 1930's buildup to global conflagration?

Systematic destabilization as related to Oil's influence is a primary worry, and how Russia could, but hopefully won't, leverage it in such a way that simply a lack of fuel spikes inflation incredibly, depressing basically everything. Hope is not a strategy, but hopefully it's not going to come to that, although the jury will likely be out for awhile yet.

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