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Putin, Melnichenko, Erdogan: Three Geopolitical Risks for Markets
Three geopolitical risk events: Putin's war blindness, Melnichenko's oligarch peace plan, Erdogan's health collapse. How they affect markets and what to watch next.
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Three pieces published this week frame a set of political risks that are rarely priced together. Paul Craig Roberts argues Putin has lost touch with the reality of the war, that his refusal to acknowledge the full scale of NATO's involvement has left Russia's patriotic elements concluding he is a lost cause. "Putin is still thinking and acting as if the conflict is limited to Donbas," Roberts writes. The conclusion: the drone escalation Trump authorized on July 8 will not produce the negotiated end Rubio described. It will widen the war, potentially hitting Russian energy infrastructure more directly.
Simple read: Russian assets, from the ruble to Moscow-listed equities, have already repriced some escalation premium. The better market read is that the premium is still thin. Roberts' charge of blindness, if correct, means Putin will not blink first. That raises the odds of a supply shock in gas, oil, or wheat before the harvest closes. Traders pricing Brent at $75 should watch whether Ukrainian long-range strikes hit refineries or export terminals – that would push the risk premium higher.
The second piece is Andrei Melnichenko's interview with The Economist, based on 60 hours of conversation. Melnichenko, a Russian oligarch with fortunes in banking, fertilizers, and coal, proposes a peaceful transition of power: international capital accepts Russia's sovereignty, and Russian capital – meaning his own circle – gets a seat at the table. He calls it "respect for national sovereignty." The mechanism is a Trump-branded license fee, a management fee, and an annual royalty – in other words, a business deal between oligarchs. This is not a peace plan; it is a property settlement. If Melnichenko's faction gains influence, the risk is that Western sanctions get relaxed for a select few while the war continues. The market effect would be a two-tier discount on Russian assets: some oligarch-linked companies reopen for foreign capital, while state-owned energy giants stay sanctioned.