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U.S. puts troops on alert as Russia-Ukraine tensions build

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Yahoo Finance's Rick Newman joins the Live show to break down the outlook for oil prices and U.S. response as Russia-Ukraine tension builds up.

Video transcript

JULIE HYMAN: I want to bring in Rick Newman now to this conversation because he is watching that situation, that political situation very closely as well. So Rick, tell us about what you have been watching in terms of this power play that is going on here on the part of Russia. How commodities feed into it and then of course you're watching President Biden's role in all of this as well

RICK NEWMAN: Yeah. Just a quick follow up Julie, on the discussion about oil prices. So they have not really moved on what we've been seeing so far with this standoff and the potential invasion of Ukraine, but Moody's analytics just a little while ago, put out a note saying, oil prices could easily jump over $100 per barrel if this conflict would lead to Russia halting exports of oil so, that would go a pretty long way.

I don't think the baseline assumption is that Russia would automatically stop exporting oil or sanctions would force Russia to stop exporting oil if there was an invasion of Ukraine, because that would hurt everybody who buys oil of course. And that's a lot of the European countries who rely upon Russia for oil and also for natural gas.

So even if there is some kind of shooting war on the Russia-Ukraine border That does not mean there will be a halt of energy exports from Russia. But it means that will suddenly be something that is in play and we probably would see that reflected in market prices at least for a while.

JULIE HYMAN: And Rick, just quickly here as we watched this ramping up of tensions and ponder potential US involvement here. What do you think is motivating President Biden when it comes to sort of teasing that involvement?

RICK NEWMAN: Well yesterday, we got the news that the Pentagon has told about 8,500 troops to prepare for a possible deployment to Eastern Europe. This does not mean they would be going to Ukraine. I think that's an important distinction everybody needs to keep in mind. They would be going there to play some kind of support role possibly also to help evacuate Americans from Ukraine if that becomes necessary.

But I think a big shadow hanging over what Biden's doing right now with regard to Ukraine is Afghanistan. That of course, looked like a disaster last year. It's not the fact that Biden withdrew US troops, it's that he withdrew US troops in contrary to what Biden himself had predicted. Afghanistan rapidly fell to the Taliban and of course, we had that horrifying terrorist attack that killed 13 US service members last August.

So that looked like a fail for the Biden administration and Biden does not like getting involved in foreign entanglements. I think he would be very careful if he did put US troops into Eastern Europe. There probably would be a limited deployment with a deadline, for example. But I think this the Biden administration for sure also realized that they looked very weak coming out of Afghanistan and they don't want a repeat of that with regard to whatever happens between Russia and Ukraine.

RICK NEWMAN: Interesting parallel. Thank you so much Rick, appreciate it.

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