European stocks slipped 3% on Monday with news that the US and European allies are considering a ban on the imports of Russian oil and natural gas, risking global “stagflation.” As a result, the pan-European Stoxx 600 index tumbled 3.6% in early trade; whereas banks plunged 7.6%. Oil and gas jumped 2.3%.
Last week, the continental benchmark lost 7% and suffered its worst week since the onset of the coronavirus pandemic in March 2020.
Secretary of State Antony Blinken said on Sunday that the US is in talks with its European allies to ban the import of Russian oil and natural gas in response to the latter’s invasion of Ukraine. Despite being aware of their dependence on Russia’s resources—constituting up to 30% of oil and 39% of natural gas—the European allies seem to be supportive of the ban. The Democratic and Republican parties have also backed President Joe Biden and the cabinet in this decision.
Responding to the news, the price of Brent Crude was last seen rising to $127.44 per barrel and US crude WAS had reached $124.60 per barrel. This marks the highest surge since 2008.
The countries involved in the decision are also looking to ensure their economies aren’t affected after cutting off the supplies from Russia.
