The US government and EU authorities said over the weekend that they are considering banning Russian oil imports. Shortly after, the ruble dumped by another 10%, while oil prices skyrocketed during early Monday trading hours.
Following President Putin’s “special military operation” against Ukraine, which became an all-out war between the two former Soviet states, the EU and the US began imposing sanctions against Russia instead of getting directly involved in the conflict.
This resulted in countless western companies leaving the Russian Federation, freezing assets belonging to oligarchs, banning some banks from SWIFT, and others. Oil, though, one of Russia’s largest exports, remains untouched, at least for now.
The situation could change soon as the EU and the US said over the weekend that they are in “active discussions” to develop legislation prohibiting the imports of Russian oil.
“We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course, at the same time, maintaining a steady global supply of oil.” – said US Secretary of State Antony Blinken.
Somewhat expectedly, this had an immediate effect on the prices of the affected assets. Oil shot up during Asian trading hours by almost 20%, while Brent neared $130 per barrel.
In contrast, Russia’s national currency tumbled once again by another 11% against the dollar. The ruble is down by more than 40% against the greenback since the war broke less than two weeks ago.
But it’s not only the ruble, as almost all European currencies took a hit, especially those operating in countries closest to the war zone. In the past month, the euro is down by roughly 5% against the dollar.
When the ruble started to plummet initially as the West imposed its sanctions against Russia, the cryptocurrency trading volumes from the world’s largest country by landmass skyrocketed. Shortly after, bitcoin and the alts soared in prices.
While some watchdogs speculate that oligarchs can employ the asset class to bypass sanctions, which seems highly unlikely to Coinbase CEO and Ripple CEO, crypto community members believe that bitcoin could actually help Russians in times when their national currency dumps.
As such, it would be compelling to follow if those crypto trading volumes see a rapid increase in the following days, now that the ruble has lost another sizeable chunk of its value.
