The stock market dropped during early trading Monday after the U.S. benchmark oil index briefly touched its highest level since the Great Recession.
The Dow Jones Industrial Average, an index measuring 30 major U.S. corporations, dropped 0.81% as of early Monday. The S&P index, which measures 500 of the largest publicly-traded companies, fell more than 0.5%.
Late Sunday, the benchmark West Texas Intermediate crude oil futures hit more than $130 per barrel for the first time since July 2008. The index remained high on Monday, hovering above $118 per barrel, up more than 3%.
“Oil is rising on the prospect for a full embargo of Russian oil and products,” Again Capital partner John Kilduff told CNBC. “Already high gasoline prices are going to keep going up in a jarring fashion. Prices in some states will be pushing $5 pretty quickly.”
Secretary of State Antony Blinken said that the U.S. was engaged in “very active discussions” with Western allies about implementing a ban on Russian oil imports during an interview Sunday. The White House balked at including such a restriction in previous rounds of economic sanctions targeting Russia, arguing it would hurt American and European consumers.
Last week, two dozen bicameral Democrats and Republicans, led by Senate Energy and Natural Resources Chairman Joe Manchin, upped the pressure on President Joe Biden to implement a ban on Russian oil, introducing legislation restricting imports. House Speaker Nancy Pelosi also said she would back an import ban.
The U.S. imported more than 670,000 barrels of oil per day from Russia in 2021, U.S. Energy Information Administration data showed. Europe imports about 27% of its oil from Russia, according to the latest European Union figures.
Meanwhile, gasoline prices, largely determined by oil prices, have surged in recent weeks.
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