Another week, another jaw-dropping rally in energy prices.
Brent crude surged as high as $139 after the US said it was in discussions over an embargo of imports from Russia, with reports it could roll out the measure even without the support of its European allies.
The West has so far refrained from targeting Russia’s energy sector with sanctions, given the impact it would have on prices. Still, many traders have decided to shun Russian oil anyway.
But an official ban would spark an even bigger supply crisis at a time when the market is already under pressure. It would also fuel fears that Vladimir Putin could retaliate by cutting gas supplies to Europe.
5 things to start your day
1) War in Ukraine risks triggering civil unrest in Middle East, analysts warn Disruption to what supplies is pushing up prices, with Egypt and Lebanon particularly vulnerable
2) Sanctioned Russian defence companies attend major arms fair in Riyadh The World Defense Show has started in Riyadh
3) PwC and KPMG withdraw from Russia Auditors join going corporate backlash against invasion of Ukraine
4) UK investors have £5bn trapped in Moscow’s shuttered stock market Russia’s stock market was closed for all of last week
5) Russia’s credit rating slashed to second worst level of junk Ratings agency Moody’s considers the country more likely to default on its debts than Iraq, Ecuador or Ethiopia
What happened overnight
Oil leapt as it emerged both Europe and the US are discussing a possible embargo on Russian oil imports. There are also concerns over delays in the potential return of Iranian crude to global markets, with talks to revive Iran’s 2015 nuclear deal with world powers mired in uncertainty. In the first few minutes of trade on Sunday, both Brent and WTI benchmarks rose to their highest since July 2008 with Brent at $139.13 a barrel and WTI at $130.50.
Coming up today
- Corporate: Clarkson, HgCapital Trust (full-year results)
- Economics: Halifax house price index (UK); trade balance (China); retail sales (Germany)