© Bloomberg/GettyOil prices have jumped more than 10% and are nearing record highs as US and Europe consider ban on Russian crude.
The global benchmark of Brent crude hit US$139.13 a barrel at the start of trading on Monday, a leap of more than $20 on Friday's close of $118.03.
The all-time of $147.50 was reached in July 2008 but some analysts think that mark could be surpassed because of the geopolitical impact of the Ukraine crisis.
Stock markets headed the opposite way with more big losses when trading began on Monday. The Nikkei in Tokyo was down almost 3%, the Hang Seng was off 3.6% and the Shanghai index had lost 2.3% by 7am GMT. In futures trade, the FTSE100 off 2.6% and the S&P500 down 1.3%.
The panic on trading floors sent safe havens sharply higher, with gold hitting as much as $2,000.86, its highest since mid-2020.
Although the oil price slipped back to $130 after the initial surge, consumers still face higher household energy and petrol costs, while inflation will rise across the board if businesses are forced to pass on higher fuel expenses.
The price of natural gas is closely linked to crude oil and is sure to lift again. Gas prices set a new record high mark on Friday in the UK, for example, when national balancing point (NBP) benchmark soared above 500p a therm.
Having climbed 21% last week, Brent crude was further energised by the risk of a ban of Russian oil by the US and Europe.
Mohamed El-Erian, cheif economist at the insurer Allianz, said that it appeared likely that the new sanctions would be imposed given the continued bombardment of Ukrainian cities.
Comment: Ukrainian cities aren't being 'bombarded', at all, military installations and US-backed bioweapon laboratories have been taken out by precision airstrikes and key cities are being encircled, meanwhile Ukrainian forces secret themselves amongst residential areas in their attempt to use civilians as human shields.
In addition Russia has called for temporary ceasefires to allow civilians (as well as any military wishing to surrender) to pass through humanitarian corridors, however, amidst this pause, Ukrainian forces have not only shelled civilians areas they've threatened to shoot anyone attempting to leave: Day 11 of Russian incursion into Ukraine: Encirclement of Kiev forces in Donetsk, operational pause in north
"It's hard to see such sanctions not being imposed given the atrocities being committed against Ukraine," he said on Twitter.
Comment: The Nazi's in Ukraine, that the US is funding, arming, and generally providing all round support for, are the ones guilty of atrocities: Zelensky is Not in Charge of Ukraine, Nazis Are - And They Believe They Are on a Mission From God to 'Derussify Ukraine in Holy War'
Bank of America chief economist Ethan Harris said cutting off most of Russia's energy exports would be a "major shock to global markets", adding that the loss of Russia's 5m barrels could see oil prices double to $200 a barrel.
Mike Muller, of commodity trading firm Vitol, also said prices could rise further. "I don't think we've priced in everything yet," he said.
Commodity prices in general are having their strongest start to any year since 1915, Bank of America said. Among the many movers last week, nickel rose 19%, aluminium 15%, zinc 12%, and copper 8%, while wheat futures surged 60% and corn 15%.
Comment: A 'strong start' is a bit of misnomer for the average person, because it means that the cost of living is set to soar further.
That will only add to the global inflationary pulse with US consumer price data this week expected to show annual growth at a stratospheric 7.9%, and the core measure at 6.4%.
It leaves a tough decision for the European Central Bank when it meets this week against a backdrop of a sharply falling euro.
The nightmare scenario of stagflation - where inflation combines with stagnating growth - looms for the world economy.
"Given the potential for stagflation is very real, the ECB is likely to maintain maximum flexibility with its [quantitative easing] programme at €20bn through the second quarter and potentially beyond, thus effectively pushing out the timing of rate hikes," said Tapas Strickland, an economist at NAB.
Comment: The same QE program that has been in effect since the banking crash of 2007/8. It appears that without QE - which is essentially debt the taxpayer will ultimately shoulder - the system would cease to function.
"Higher inflation forecasts, though, mean rate hikes will be needed on the horizon."
With the outlook for European growth darkening, the single currency took a beating and fell 3% last week to its lowest since mid-2020. It was last down 0.6% at $1.0864 and risked testing its 2020 trough of about $1.0635. It has also lost a lot of ground against the pound, which now buys €1.214.
The dollar was broadly firmer, supported in part by a strong payrolls report which only reaffirmed market expectations for a rate hike from the Federal Reserve this month. The dollar index was last at 98.812 having climbed 2.3% last week.
Gold benefited from its status as one of the oldest of safe harbours and was last up 0.7% at $1,983 an ounce.
About a decade ago I purchased a bigger piece of gold for a five-digit € sum. And this € value has more than doubled in the meantime. I do not consider this "€ gain", but diverted loss, and an indicator of the real inflation.