European stocks are set to fall on Monday after news that the US and European allies are considering a ban on Russian oil imports, raising the risk of global “stagflation”.

Britain’s FTSE 100 is down about 137 points to 6,850, the German DAX is set to fall about 379 points to 12,716 and the French CAC 40 is expected to fall about 152 points to 5,910.

Last week, the pan-European Stoxx 600 benchmark lost 7% and experienced its worst week since March 2020, when the coronavirus pandemic began.

US Secretary of State Anthony Blinken told NBC Sunday that Washington is in “very active negotiations” with European governments to ban imports of Russian oil and natural gas.

Oil prices surged to their highest level since 2008 in response to the news, with international benchmark Brent Crude last up 10% to around $130 a barrel and U.S. oil up 8.8% to around $125.80. dollars per barrel.

In recent days, Russia has continued to escalate its offensive against neighboring Ukraine, with forces attempting to advance and isolate the capital Kyiv and other major cities, meeting fierce Ukrainian resistance.

Western powers have already imposed a string of punitive economic sanctions in an attempt to isolate Russia from the global economy, but the Kremlin has continued its incursion, with Ukrainian President Volodymyr Zelensky calling on NATO to impose a no-fly zone in Ukraine.

Asia-Pacific stocks fell sharply on Monday, with Hong Kong’s Hang Seng index falling more than 3%, sending losses to the region. US stock futures opened negative on Wall Street later that day.

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