Sanctions on Russia have already rattled through international markets, hitting European equities in particular.
Equity markets have plunged, while oil prices have soared to a near 14-year high and safe-haven gold has broken $2,000 as investors grow increasingly fearful about the impact of the Ukraine war on the global economy.
Trading floors on Monday were a sea of red in early exchanges with experts warning of a period of stagflation with the spike in crude likely to light a fire under already high inflation.
The commodity at one point rocketed almost 18 percent to $139.13 - a level not seen since mid-2008 - after US Secretary of State Antony Blinken said the White House and allies were in talks about banning imports from Russia.
With the country the third-biggest producer of oil, such a move would compound a supply crisis just as demand takes off. Other commodities sourced from the region such as wheat and metals were also sharply higher.
The panic on trading floors has sent safe havens sharply higher, with gold, a key go-to in times of crisis and turmoil, hitting as much as $2,000.86, its highest since mid-2020.
The dollar was also well up against most other currencies, while Treasuries continued to rally.
‘Severe impact’ on global economy
Concerns about the impact on the global economy have rattled through markets, with European equities particularly badly hit owing to the continent's reliance on Russian energy. The euro remained wedged below $1.10 for the first time since mid-2020.
World governments had until now not included Russian oil in their wide-ranging sanctions on Moscow owing to concerns about the impact on prices and consumers, though trade has become increasingly tough as banks pull financing and shipping costs rise.
The surge in crude is giving central banks a headache as they start to tighten pandemic-era monetary policy to fight inflation, which is already at a 40-year high in the United States.
The International Monetary Fund warned over the weekend that the war and sanctions on Russia will have a "severe impact" on the global economy.