Global markets stumble and oil prices rise sharply with the Russian attack on Ukraine

US markets paid attention to the opening, with all major indexes down 2 percent or more. Around 1 p.m., the Dow Jones Industrial Average was down 720 points, or 2.1%. The broader Standard & Poor’s 500 index recovered somewhat, but remained down about 1.3 percent. The tech-heavy Nasdaq briefly entered a bear market before reversing, but remained down 0.4 percent.

Although the Russian incursion has only just begun, indications on Thursday — including strikes through Ukraine — are that a large-scale military offensive would trigger severe US and European Union sanctions, harming not only the Russian economy, but the entire world. . Consumers around the world are already facing massive price increases linked to hyperinflation and turbulent energy markets, and the pains are now likely to intensify.

Russia is a dominant source of natural gas and oil, particularly to Europe, and some of its supplies pass through a pipeline through Ukraine. The price of Brent crude, the global benchmark, rose 7.9 percent to nearly $101.50 a barrel – the first time it has been in the triple digits since 2014 – while US oil jumped 8.3 percent to $99.70.

The national average for a gallon of gasoline on Thursday was $3.54, according to AAA, up from $3.33 just a month ago. A year ago, when the epidemic was still largely waning, the national average was just $2.66.

Russia has warned that Americans will feel fully the “consequences” of the sanctions announced by President Biden earlier this week. Biden acknowledged that the crisis could lead to higher gasoline prices, while US companies were warned to prepare for potential cyberattacks. Biden said more “severe sanctions” would be announced Thursday in the wake of the invasion.

“The greater the conflict, the greater the impact on global energy supplies, the greater the burden on the European economy, and the greater the potential burden on US exports and consumer spending,” Bill Adams, chief economist at Comerica Bank, said Thursday in comments emailed to The Post.

Markets hate uncertainty, and the attack arrives at a time when the global economy is already grappling with pandemic-related challenges in the form of a rally economic inflationmessy supply chains and a shortage of employment.

Investors fled to safer assets, sending the yield on 10-year US Treasuries sharply down to 1.865 percent. Bond yields move inversely with prices.

Gold – a Russian export and an investor safe haven – was trading 0.8 percent, about $1,925 an ounce. Standard prices for aluminum, nickel, and wheat and maize (other exports from Russia and Ukraine) also rose to multi-year highs.

Despite Thursday’s immediate financial reaction, no country suffered greater losses than those in Russia, whose main stock market index fell nearly 45 percent in the early hours of Thursday, hitting its lowest level since 2016. Trading was suspended Briefly amid free fall. The ruble has fallen to its weakest point in at least the past 10 years, giving Russians less spending power when they travel abroad.

Oil prices have risen more than 40 percent since December, partly affected by speculation that Putin may launch an offensive as Russia masses forces on three sides of Ukraine.

After Russia’s invasion of Crimea in 2014, Europe’s dependence on Russian energy prevented the bloc from imposing certain sanctions that both sides suffer. But this time European leaders are likely to agree that a sharper response is needed, and they draw up plans to wean themselves off dependence on Russian oil and gas.

This includes, immediately, the suspension of the Nord Stream 2 gas pipeline between Germany and Russia. But any new energy strategy is sure to take years — and it will come at the expense of massive taxpayers.

Last week’s analysis from Britain’s Barclays bank indicated that Europe will struggle to “replace large amounts of Russian oil and gas with alternative energy sources in other countries, especially in a short period of time.” The bank’s analysis said this could lead to rationing, raise prices and eventually reduce GDP growth.

Some of those concerns were evident in the stock market on Thursday, with Germany’s DAX down more sharply than most, dropping 4.5 percent by midday. The index has lost more than 14 percent of its value since early January. The European benchmark Stoxx 600 was down 3.3 percent.

The European Commission, Ursula von der Leyen, said the 27-nation bloc would meet later Thursday to discuss new sanctions. She said the measures would weaken Russia’s economic base and “ability to modernize” by freezing the country’s assets in the European Union and cutting off its access to the European financial market.