Oil rises above $100 a barrel for the first time since 2014

Oil prices rose to $102 per barrel, Moscow’s stock exchange suspended all trading and the rouble fell to a record low after Russia’s president Vladimir Putin ordered a “special military operation” in eastern Ukraine.

Brent crude rose as much as 5.4 per cent, with the international benchmark hitting $102 a barrel, the first time it has crossed the $100 threshold since 2014. West Texas Intermediate, the US marker, climbed 4.7 per cent to $96.43.

“If this situation continues to deteriorate I wouldn’t be surprised to see Brent at $120 a barrel, and that is really the point you’d expect to see co-ordinated intervention [by global suppliers],” said Robert Rennie, global head of market strategy at Westpac.

The Moscow Exchange announced on Thursday morning that trading in all markets had been suspended, giving no indication of when it would reopen.

Russian stocks have plunged in response to the crisis. The Moex index had fallen as much as 14.2 per cent on Monday, closing the main trading session in its biggest one-day fall since 2014, when Russia annexed Crimea. The benchmark is down more than 18 per cent this year.

In currency markets, the military operation sparked a sell-off in the Russian rouble, which sank as much as 6.3 per cent to Rbs86.81 a dollar, the lowest level on record, according to Bloomberg data. The euro also fell almost 1 per cent against the greenback to $1.1212.

Futures pointed to heavy losses for European shares, with the Euro Stoxx 50 set to drop more than 3 per cent at the open, while the FTSE 100 was expected to fall 2 per cent.

The S&P 500 was tipped to fall almost 2 per cent after closing Wednesday’s session sharply lower, while the Nasdaq was expected to fall 2.3 per cent, priming the tech-focused benchmark to drop more than 20 per cent from its most recent peak and into a bear market.

The Russian offensive sent global equities lower with Hong Kong’s benchmark Hang Seng index dropping more than 3 per cent on Thursday, South Korea’s Kospi falling 2.4 per cent and Japan’s Topix down 1.7 per cent. China’s CSI 300 index of Shanghai- and Shenzhen-listed shares fell 1.3 per cent.

Investors seeking refuge from share price falls piled into sovereign bond markets, driving down yields. The yield on 10-year US Treasuries fell 0.12 percentage points to 1.873 per cent. Gold also rose as a rally for havens sent the precious metal almost 2 per cent higher to more than $1,942 per troy ounce.

The market ructions in Asia came after Putin said he had ordered a military operation in Ukraine’s Donbas region and demanded that Kyiv’s army lay down its arms.

“All responsibility for the possible bloodshed will be fully and completely on the conscience of the ruling regime,” he said in an address broadcast on Russian state television.

On Wednesday Kyiv had declared a state of emergency after the Kremlin said two Moscow-backed separatist territories in Ukraine had asked Putin to “repel the aggression of the Ukrainian regime”.