Ukraine Russia updates: Russian oligarchs lose $45 billion

The price of oil has surged as tensions boil over between Russia and Ukraine, with the United States announcing sanctions.

Oil prices have surged close to $100 per barrel over fears of a full-blown conflict between Russia and Ukraine.

The price of Brent crude oil is currently at its highest level in more than seven years.

Stocks in Europe sank 2 per cent but clawed back the losses as investors digest the increased tensions.

The situation on the Ukraine border ramped up yesterday when Russian President Vladimir Putin recognised two pro-Russian rebel Ukrainian territories as independent entities. He also sent Russian “peacekeeping” troops into the regions.

Germany responded by announcing it was halting certification of the Nord Stream 2 gas pipeline from Russia and said the European Union would adopt “robust and massive” economic sanctions.

US President Joe Biden this morning announced sweeping sanctions and issued a warning to Russia.

Follow our live blog on the Russia-Ukraine conflict here.

Oil price surges

Brent North Sea crude oil reached $99.50 per barrel, the highest level in seven years.

It pulled back to just below $98, still a gain of around 2.5 per cent compared with late Monday.

“The intensifying crisis between Russia and Ukraine has raised concerns about the supply disruptions that would ensue as sanctions look set to cripple Russia, the world’s second largest oil exporter and the world’s top natural gas producer,” noted Victoria Scholar, head of investment at Interactive Investor.

Petrol prices in Australia have already passed $2 in some places.

Stay up to date with the latest market moves with Flash. 25+ news channels in 1 place. New to Flash? Try 14 days free now >

A view of a board showing currency exchange rates of the US dollar and the euro against Russian rouble in Moscow. Picture: AFP

ASX edges higher

The ASX has edged higher despite expectations it would follow Wall Street’s 2 per cent fall.

Yesterday the S&P/ASX200 was mostly unaffected by the Ukraine turmoil, closing little unchanged at 7161.30.

This morning Aussie stocks rose 0.1 per cent at the opening after strong results from WiseTech Global and Woolworths.

ASX futures were down 3 points earlier today.

It comes after US leaders described Russia’s actions yesterday as the “beginning of an invasion”.

“Markets are waking up to the reality today that this is the biggest threat to European security since World War II,” Tim Ash from BlueBay Asset Management told the Financial Times.

Russian stock indexes fell sharply Tuesday morning. Picture: AFP

Nord Stream 2 pipeline suspended

German Chancellor Olaf Scholz said he was suspending the Nord Stream 2 pipeline project with Russia in response to Moscow’s recognition of breakaway regions Donetsk and Luhansk.

Ukrainian President Volodymyr Zelensky had demanded an immediate halt to the project, set to pipe Russian natural gas to Germany via the Baltic Sea.

Mr Zelensky said Russia must be punished for its recognition of the two separatist-held regions with “immediate sanctions” that include “the complete stop of Nord Stream 2”.

Russian stocks plunge

Russia’s Moex index plunged as much as 19 cent for the week at one point, before closing down by 10 per cent.

Russia’s main stock benchmark has fallen by more than a quarter since October as investors fear sweeping sanctions.

The Bank of Russia said it was “monitoring the developments in the financial market and is ready to take all necessary measures to maintain financial stability”.

If a wider conflict takes place, experts predict the price of natural gas in Europe will skyrocket.

Russian stocks fell sharply but have since recovered some ground.

The net worth of Russia’s super-rich has plunged.

Gennady Timchenko, who controls the Volga Group, an energy, transportation and construction business, has lost US$6.47 billion from his net worth this year, according to Bloomberg’s index.

Leonid Mikhelson’s net worth plunged US$6.23 billion and Vagit Alekperov’s dropped US$3.48 billion

The Sydney Morning Herald reports Russian oligarchs have lost a collective $US33 billion ($45.7 billion) this year.

US sanctions against Russia

US President Joe Biden announced sanctions against Russian banks and the country’s wealthy elite after what he said was Moscow’s launching of an invasion against Ukraine.

“This is the beginning of a Russian invasion of Ukraine,” Biden said in a televised speech at the White House.

Mr Biden stressed that the measures were only a “first tranche” in response to Mr Putin “carving out a big chunk of Ukraine”.

The US President said that more sanctions will follow if Mr Putin extends Russia’s military grip beyond two small territories in the eastern Donbas region that are already under control of Russian-backed separatists.

“Today we’re implementing full blocking sanctions on two large financial institutions. The EBD and Primacy Bank, both of which have close links to the Kremlin and Russian military,” Secretary of State Antony Blinken said.

“Collectively, they hold more than $80 billion in assets. These measures will freeze their assets in the United States, prohibit American individuals or businesses from doing any transactions with them, shut them out of the global financial system, and foreclose access to the US dollar.”