US and Europe mulling ban on Russian oil; oil prices are rising

LONDON. European stocks fell on Monday after news that the US and European allies are considering a ban on Russian oil imports, raising the risk of global “stagflation”.

The pan-European Stoxx 600 fell 3.6% in early trading, with banks falling 7.6% on losses and oil and gas jumping 2.3%.

The continental benchmark lost 7% last week and experienced its worst week since March 2020, when the coronavirus pandemic began.

US Secretary of State Anthony Blinken told NBC Sunday that Washington is in “very active negotiations” with European governments to ban imports of Russian oil and natural gas.

Such a move could risk stagflation — a period of slow economic growth and high unemployment combined with high inflation — for the global economy.

Oil prices surged to their highest level since 2008 in response to the news before cutting back slightly. Brent oil was last up 7.8% to about $127.44 a barrel, while U.S. crude rose 7.7% to about $124.60 a barrel.

In recent days, Russia has continued to escalate its offensive against neighboring Ukraine, with forces attempting to advance and isolate the capital Kyiv and other major cities, meeting fierce Ukrainian resistance.

Western powers have already imposed a string of punitive economic sanctions in an attempt to isolate Russia from the global economy, but the Kremlin continues its intrusion, and Ukrainian President Volodymyr Zelensky has called for NATO to impose a no-fly zone in Ukraine, to no avail so far.

Asia-Pacific stocks fell sharply on Monday, with Hong Kong’s Hang Seng index falling more than 3.5%, outpacing regional losses. US stock futures pointed to a negative opening on Wall Street later that day.

In terms of individual share price performance, Hungarian low-cost airline Wizz Air and Swiss travel retailer Dufry fell more than 14% in early trading to the bottom of the Stoxx 600.

At the top of the index, shares of Polymetal International jumped 15% after a series of board changes as the company’s shares continue to recover from a prolonged sell-off due to its presence in Russia.

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