Biden Putin meme

There's always talk about war and it rarely happens. Two years ago the US was assassinating a Iranian general and an airliner was shot down. It ultimately amounted to nothing market moving.

For weeks, we've been hearing about Russian troop buildups on the Ukraine border. Supposedly, there are 127,000 troops there now and many signs point to an invasion.

Then -- seemingly out of nowhere -- there were mass protests in Kazakhstan and Russia had to send in its military. There have also been two rounds of negotiations between Russia and NATO that have seemingly gone nowhere.

Lately, there have been reports of extensive arms supplies to Ukraine with the UK confirming it sent " light, anti-armour, defensive weapon systems" to Ukraine.

“Our view is this is an extremely dangerous situation. We're now at a stage where Russia could at any point launch an attack in Ukraine,” White House press secretary Jen Psaki told reporters at a briefing yesterday, adding later that her language was “more stark than we have been.”

US President Joe Biden will hold a press conference later today and Russia-Ukraine will surely be on the agenda.

Arguing against an invasion is that 127,000 troops probably won't be enough. For instance, the US sent 248,000 soldiers to Iraq in 2003 along with 45,000 from the UK. And that's in a country that's much smaller than the Ukraine and with a smaller army.

The cost to Russia is potentially enormous. Then again, perhaps they believe there is enough Russian support within the Ukraine for a successful operation.

Some military watchers are estimating a high probability of invasion but only Putin knows what the real strategy is. There's said to be a window coming in about two weeks when everything is frozen enough to lead to ideal conditions.

What has me really spooked is the relentless rally in oil. Brent is up again today and trading at a seven-year high. That's come despite omicron and the recent negative tone in markets. It makes me think that someone is trying to secure as much supply as possible ahead of a potential invasion. Of course, that could simply be prudence due to tail risks but when markets talk, I listen.

Russia Ukraine oil brent

I would hate to trade around a war but if Russia does invade, the reaction in all risk assets will be ugly. But you can bet that oil prices will be a rare winner, along with the yen.