Russia says it will sell gas to some countries in rubles instead of US dollars, and US stocks have fallen sharply as oil prices surged.
Russian President Vladimir Putin has said Moscow will seek payment in rubles for gas sales to “unfriendly” countries in response to Western sanctions crippling the Russian economy.
Global commodity trading is generally done in US dollars.
The Russian president’s plan would further disrupt commodity markets.
In a televised meeting with government ministers, Putin said Russia would continue to supply natural gas under existing contracts.
Moscow has drawn up a list of hostile countries that includes the United States, members of the European Union, Britain and Japan.
Russia supplies 40% of European gas.
Putin’s announcement saw the ruble jump to a one-month high against the greenback at 87.50.
Western leaders gathered in Brussels to plan more measures to force Russia to end the war in Ukraine as Russia bombarded the Ukrainian capital, kyiv.
The world’s largest bond investor, PIMCO, said the war was “casting an even thicker layer of uncertainty” over the already uncertain economic outlook.
Oil prices soar
Oil prices jumped more than 5% due to sanctions imposed on Russia, causing fuel shortages and disrupting the oil market.
Russia is the world’s largest oil exporter and provides nearly half of Europe’s energy.
Brent crude rose 5.4% to US$121.57 a barrel, while West Texas crude rose 5% to US$114.57 a barrel.
Brent crude approached a record high earlier this month due to the war. And local gasoline prices are at record highs, driving inflation.
Spot gold rose 1.3% to US$19,445.42 an ounce.
The Australian dollar soared on rising commodity prices.
It rose 0.4% to around 75 US cents.
Bitcoin fell 1.3% to $42,180.
In futures trading, the ASX SPI 200 index rose 0.3% to 7,383, indicating that the local equity market would open higher.
Wall Street in the red
US stocks were hit by rising oil prices and ended lower.
At the close of trade, the Dow Jones index fell 1.3% to 34,359, the S&P 500 lost 1.2% to 4,456 and the Nasdaq fell 1.3% to 13,923.
Computer software company Adobe lost 10% after forecasting lower second-quarter revenue.
Tech stocks such as Tesla and Apple gained.
Video game retailer Gamestop surged after Chairman Ryan Cohen’s investment firm bought 100,000 shares.
Inflation rising in the UK
Prices in the UK hit a new 30-year high of 6.2%, higher than expected.
A budget update from Finance Minister Rishi Sunak failed to soothe investors’ nerves.
In London, the FTSE 100 fell 0.2% to 7,461, the DAX in Germany fell 1.3% to 14,284 and the CAC 40 fell 1.2% to 6,581.