Live updates: follow the latest news on Russia-Ukraine
Oil prices surged past $130 a barrel on Tuesday, their highest since 2008, after President Joe Biden announced that the US would ban crude, gas and coal imports from Russia, intensifying its sanctions on the world's second-largest energy exporter after its military offensive in Ukraine.
Brent, the global benchmark for two thirds of the world's oil, hit $131.28 a barrel, and West Texas Intermediate – the gauge that tracks US crude – jumped to $126.74 at 8.12pm UAE time.
The US move is part of Washington's strategy to try to freeze Russia out of markets and isolate its economy.
“The United States is targeting the main artery of Russian economy,” Mr Biden said on Tuesday.
“We will not be part of subsidising [Russian President Vladimir] Putin’s war.”
Russia supplies about 40 per cent of Europe's gas, while its crude accounts for about 3 per cent of US oil imports, equal to about 200,000 barrels a day.
The European allies of the US have not announced a similar ban on Russian oil. However, the UK is expected to announce a gradual ban on Russian oil imports later today but exclude gas supplies, Politico reported quoting Whitehall sources.
"The unilateral aspect of that is the most important as far as markets are concerned, which is why oil prices are only 5 per cent to 6 per cent higher today, rather than 15 per cent to 20 per cent," said Craig Erlam, a senior market analyst at Oanda.
"Still, it's a bold move from the US, even if Russian imports make up a relatively small number. It's another step towards the West turning its back on Russia and leaving it isolated in the world. Europe's move will be slower but the debt raising is a big first step towards something similar."
On Monday, Russia said it retains the option to cut natural gas supplies to Europe through the Nord Stream 1 pipeline if the US and its EU allies ban its crude imports.
Such a move would shake energy markets further and exacerbate inflationary pressures globally.
Russia could stop the flow of gas through pipelines from the country to Germany after Berlin decided to stop the opening of the new Nord Stream 2 pipeline, Russian Deputy Prime Minister Alexander Novak, who is also in charge of energy affairs said in a televised speech on Monday.
“We understand that in connection with the unfounded accusations against Russia regarding the energy crisis in Europe and the imposition of a ban on Nord Stream 2, we have every right to take a mirror decision and impose an embargo on gas pumping through the Nord Stream 1 gas pipeline,” Mr Novak, formerly energy minister, said.
“So far, we are not making this decision. No one will benefit from this. Although European politicians are pushing us to this with their statements and accusations against Russia,” he said.
The Ukraine-Russia conflict and surge in oil prices to their highest level since 14 years, could have a “severe impact” on the global economy, the International Monetary Fund said last week.
An energy war will exacerbate inflationary pressures on the global economy where prices for food, commodities and metals have increased.
The UN index of food prices rose 4 per cent in February from January this year and was up 24 per cent from the same month a year ago, marking a record high.
Gold, the precious metal that is a traditional safe haven and hedge against inflation, jumped up to $2,076.0 an ounce on Tuesday on the Chicago Board of Trade at 7.57pm UAE time.
On Tuesday, the International Energy Agency's executive director Fatih Birol said the 61.7 million barrels of oil reserves released to the market by members of the Paris-based global energy authority last week only account for 4 per cent of its reserves.
In an interview with Bloomberg TV Mr Birol said the agency was ready to release more oil to the market to ease surging energy prices.
Last week, the IEA proposed a 10-point plan to reduce the EU’s reliance on Russian natural gas. The new proposals include halting new gas supply contracts with Russia, replacing Russian supplies and accelerating the introduction of renewable energy as well as increasing power generation from bio-energy and nuclear plants, among others.
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A Ukrainian serviceman walks past the vertical tail fin of a Russian Su-34 bomber lying in a damaged building in Kharkiv, Ukraine. AP Photo -
An apartment building damaged after shelling in Kharkiv, Ukraine. AP Photo -
A woman puts her head in her hands as she sits on a cot in a shelter, set up for displaced persons fleeing Ukraine, inside a school gymnasium in Przemysl, Poland. AP Photo -
Belarussian and suspected Russian helicopters on the flight line at Machulishchy Air Base outside Minsk, Belarus. AP Photo -
Children look on as people fleeing Russia's invasion of Ukraine shelter in a school, in Drohobych, Ukraine. Reuters -
Families eat in the shelter. Reuters -
A woman looks out from a building damaged by Russian shelling in Mykolaiv, 100 kilometres away from Odesa, western Ukraine. AFP -
A wounded Ukrainian man waits in the corridor of the central hospital of Mykolaiv. AFP -
An elderly woman is carried in a shopping cart after being rescued from Irpin, on the outskirts of Kyiv, Ukraine. AP -
A woman reacts as a train carrying children from Kyiv's Central Children's Hospital leaves the Ukrainian capital on its way to Lviv. Reuters -
A girl sits in an improvised bomb shelter in Mariupol, Ukraine. AP -
An elderly woman is coated in snow as she sits in a wheelchair after being rescued from Irpin. AP -
Belarusian volunteers take part in military exercises at the Belarusian Company base in Kyiv. AP -
Lessa, left, director of a nursery school turned into a refugee shelter, cries as she hugs Olega, who arrived from Kyiv with her baby, near Lviv. EPA -
Ukrainians pass a damaged bridge as they flee from Irpin. AP -
A man carries an elderly woman as people continue to leave Irpin. AP -
A soldier stands on a barricade made of sandbags in central Odesa, Ukraine. Reuters -
A charred Russian tank and captured tanks in the Sumy region. Reuters -
People rest at a temporary shelter for Ukrainian refugees in Przemysl, Poland. AFP -
Ukraine's ambassador to the Netherlands, Maksym Kononenko, third right, and his wife Tetiana Doroshenko, fourth left, attend a meeting of members of the Ukrainian community with Dutch King Willem-Alexander, third left, and Queen Maxima, second left, to discuss the situation in Ukraine, in The Hague. EPA -
A Ukrainian soldier looks at the destruction after shelling in Ukraine's second-largest city of Kharkiv. AFP -
A refugee holds her dog as they wait for trains to Poland in Lviv, Ukraine. Reuters -
A woman ties ribbons in Ukrainian national flag colours in a girl's hair as people wait at a refugee assistance centre in Prague, Czech Republic. EPA -
A Ukrainian soldier carries an elderly woman crossing the Irpin river on the outskirts of Kyiv. AP -
Lena, who had never left Ukraine before fleeing into Moldova, feeds Dasha, 3, soon after crossing the border. Erin Clare Brown for The National -
Refugees without immediate plans to move further inland can stay the night in tents set up on Moldova's side of the border. Erin Clare Brown for The National -
Tatiana and her son wait for a van that will carry them from the Moldovan border to Chisinau. Erin Clare Brown for The National -
Each night, the Palanca refugee camp in Moldova feeds up to 300 people who arrive with no onward plans. Erin Clare Brown for The National -
People pass a damaged bridge while fleeing the town of Irpin, close to the Ukrainian capital of Kyiv. AP -
A Ukrainian soldier stands guard next to a church in Irpin. EPA -
A firefighter holds the baby of a Ukrainian refugee at the border in Romania. AP -
Ukrainian President Volodymyr Zelenskyy speaks in Kyiv. Reuters -
A Ukrainian soldier at a checkpoint in Kyiv. AP -
Ukrainian activist Ihor Mazur, left, a veteran of the war in the country's east, looks at a night-vision device in Kyiv. AP -
Ambassadors attend a UN Security Council meeting on threats to international security after Russia's invasion of Ukraine, in New York. Reuters -
Ukraine's UN ambassador Sergey Kyslytsya holds a paper with an image of Russia's Foreign Minister Sergey Lavrov as he addresses the Security Council in New York. Reuters -
A road sign put up in support of Mr Zelenskyy outside Russia's embassy in Washington. AFP -
Ukrainian refugees at the train station in Lviv, western Ukraine. EPA -
Lethal and non-lethal Ukrainian aid is loaded on to a plane bound for Poland by Canadian soldiers in Trenton, Ontario. Reuters -
Volunteers carry medical aid and necessities at a train station in Lviv. EPA -
Everton players wear T-shirts in support of Ukraine as they warm up for an English Premier League football match against Tottenham Hotspur. AP -
A residential building damaged by Russian shelling in Chernihiv, Ukraine. Reuters -
A man walks past a checkpoint in heavy snow in Lviv. Getty -
A man fleeing fighting in Irpin waits to cross a river after Russian forces entered the city. Getty -
Soldiers assist Irpin residents underneath a damaged bridge as they flee. Getty -
Ukrainian civilians who volunteered to join the Territorial Defence Forces take part in a training exercise in Odesa after Russia's invasion. Reuters -
Men carry a body to a lorry as people flee from the frontline town of Irpin. EPA -
A Ukrainian police officer runs with a child as the sound of shelling echoes nearby in Irpin. AP -
Parents and children struggle to board a train in Lviv. AP
Introducing minimum gas storage obligations to increase the resilience of the gas system, speeding up the replacement of gas boilers with heat pumps and accelerating energy efficiency improvements in building and industry are also included in the proposal.
In 2021, the EU imported 155 billion cubic metres of natural gas from Russia, which accounted for about 45 per cent of EU gas imports and close to 40 per cent of its total gas consumption.
The EU should seek alternative sources of supply from the US, Azerbaijan, Qatar and Algeria to replace the Russian gas, Mr Birol said last week.
