Russia-Ukraine crisis: Oil jumps 10% as US, Europe mull ban on Russian crude

Brent rises $12.73 to $130.84 on Monday morning.

By Reuters

Published: Mon 7 Mar 2022, 10:28 AM

Oil prices soared more than 10 per cent in hectic trading on Monday as the risk of a US and European ban on Russian product and delays in Iranian talks triggered what was shaping up as a major stagflationary shock for world markets.

The euro extended its slide and commodities of all stripes were on the rise as the Russian-Ukraine conflict showed no sign of cooling.

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Russia calls the campaign it launched on February 24 a "special military operation", saying it has no plans to occupy Ukraine.

Brent was quoted $12.73 higher at $130.84, while US crude rose $9.92 to $125.60. The potential blow to global economic growth saw S&P 500 stock futures drop 1.1 per cent, while Nasdaq futures shed 1.4 per cent.

Futures for Japan's Nikkei were trading around 300 points below the cash close on Friday, while US Treasury futures jumped 10 ticks as investors sought safe-havens.

Having climbed 21 per cent last week, Brent crude was further energised by the risk of a ban of Russian oil by the United States and Europe. read more

"If the West cuts off most of Russia's energy exports it would be a major shock to global markets," said BofA chief economist Ethan Harris.

He estimates the loss of Russia's 5 million barrels could see oil prices double to $200 a barrel and lower economic growth globally.

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And it is not just oil, with commodity prices having their strongest start to any year since 1915, says BofA.

Among the many movers last week, nickel rose 19 per cent, aluminium 15 per cent, zinc 12 per cent, and copper 8 per cent, while wheat futures surged 60 per cent and corn 15 per cent.