The U.S. ban on Russian oil could exacerbate already-spiking oil and food prices, analysts warned, and that could set off a recession if escalated further.
If Russia retaliates by refusing to supply Europe with oil, that could"easily" send oil prices up another $20 to $30 per barrel, said Andy Lipow, president of Lipow Oil Associates. Moscow previously threatened to cut Europe off from its gas supplies if Western countries targeted its energy sector.
After President Joe Biden announced a ban on Russian fossil imports Tuesday, U.S. crude traded above $128 per barrel, while Brent jumped above $130 before paring gains. The U.K. and European Union also said they would. Prices had already been soaring in recent weeks, surging to highs not seen since 2008.
"My greatest fear is that these prices have risen so fast that you cause a recession in Europe and Latin America, that rolls on into the United States, that ultimately affects China's ability to sell consumer goods to the rest of the world," he told CNBC's"Squawk Box Asia" on Wednesday. Russia supplies 11% of global oil consumption, 17% of global gas consumption and as much as 40% of Western European gas consumption as of 2021, according to statistics from Goldman Sachs.
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