As US and Allies Consider Banning Russian Oil: Stocks Worldwide Tumble, Oil Prices Skyrocket

By Yehudit Garmaise

Stocks worldwide plunge worldwide as oil prices skyrocket to more than $120 a barrel, after US Secretary of State Antony Blinken told CNN Sunday that the United States and its European allies are “in a very active discussion” about banning Russian oil imports to attempt to stop Russian President Vladimir Putin’s brutal invasion of Ukraine.

On the US market, Dow futures fell 480 points, or 1.4%. S&P 500 and Nasdaq futures were down 1.6% and 1.8%, respectively. European markets also plunged early today.

Before the invasion, Russia was exporting 5 million barrels of crude oil a day, representing around 12% of global trade and making it the world's largest exporter, and the world's third-largest oil producer.

While the U.S. only imports 5% of its oil from Russia, Europe imports 60% of Russian oil, and China imports 20%, so a ban on Russian oil could severely impact daily living in dangerous ways for residents of Europe and China.

For countries like Germany, which source half their gas from Russia, “the worst case is that people start dying because they can’t heat their homes,” Adam Pankratz, a professor at the University of British Columbia’s Sauder School of Business, told Fortune.

“It means freezing and possibly dead Germans,” Pankratz said.

While banning Russian oil would not freeze Americans, an embargo of Russian oil will further decrease supply of oil, thereby raising prices in an already tight oil market, explained Yeap Jun Rong, a market strategist for IG Group.

On Sunday, the average US price for regular gas hit $4 a gallon, and in Los Angeles gas prices have already soared above $6 per gallon.