Oil prices jumped and stocks fell sharply on Monday as conflict deepened in Ukraine amid growing calls for tougher sanctions against Russia.
Brent crude oil climbed above $130 a barrel for some time, but was trading around $125 a barrel later on Monday. Benchmark US crude also jumped, gaining $10 and then giving up some of that advance.
European markets opened lower and US futures were down 1.7%. Gold prices climbed above $2,000 an ounce as investors bought the precious metal seen as a safe haven in times of crisis.
Russian forces were still hitting some Ukrainian cities with rockets after Moscow announced another ceasefire and proposed a handful of humanitarian corridors to allow civilians to flee Ukraine starting Monday.
A similar temporary ceasefire in two Ukrainian cities failed over the weekend - and both sides blamed each other.
Speaker of the US House of Representatives, Nancy Pelosi, said the House was exploring legislation to isolate Russia from the global economy, including the US. This included imposing restrictions on the import of its oil and energy products.
Libya's national oil company said an armed group had closed two important oil fields, putting oil prices under additional pressure. The move has led to a drop in the country's daily oil production by 330,000.
But reports say US officials may consider easing sanctions against Venezuela. This could potentially free up more crude and ease concerns about short supplies from Russia.
US crude jumped $6.92 to $122.60 a barrel in electronic trading on the New York Mercantile Exchange. An all-time high was marked in July 2008, when the price of US crude oil climbed to $145.29 per barrel.
This pushed the average price of gasoline in the US above $4 per gallon, a milestone already reached again. According to the AAA Motor Club, the price of regular gasoline rose by about 41 cents, breaking an average of $4 per gallon (3.8 liters) across the US on Sunday for the first time since 2008.
Brent crude, the international pricing standard, settled at $139.13 a barrel before falling back on Monday. In London, it was trading higher by $ 6.57 at $ 124.68 per barrel.
France's CAC 40 was down 3% at 5,879.70 in early European trade, while Germany's DAX was down 3.2% at 12,675.43. Britain's FTSE 100 fell 1.4% to 6,890.71. US stocks were set to start the week lower, with futures for both the Dow Jones Industrial Average and the S&P 500 down 1.8%.
High fuel costs are disastrous for Japan, which imports almost all of its energy. Japan's benchmark Nikkei 225 fell 2.9% to end at 25,221.41.
Hong Kong's Hang Seng fell 3.9% to 21,057.63, while South Korea's Kospi fell 2.3% to 2,651.31. Australia's S&P/ASX 200 closed down 1.0% at 7,038.60. While the Shanghai Composite ended 2.2% lower at 3,372.86.
"The Ukraine-Russia conflict will continue to dominate market sentiment and no signs of conflict resolution so far limit risk sentiment in the new week," said Yep Jun Rong, market strategist at IG in Singapore.
“It should be clear by now that economic sanctions will not deter any Russian aggression, but will serve more as a punitive measure at the expense of implications on global economic growth. Higher oil prices affect firms' margins and consumer spending. approach,” Yep said.
China said on Monday that its exports grew double digits in January and February before Russia's attack on Ukraine hit the global economy.
Customs data showed exports rose 16.3% from a year earlier, in a sign global demand was recovering ahead of President Vladimir Putin's February 24 invasion. Imports have increased by 15.5% despite the Chinese economic slowdown, which threatens to worsen the war.
China's No. 2 leader, Premier Li Keqiang, warned on Saturday that global conditions are "unstable, dire and uncertain" and that achieving Beijing's economic goals will require "difficult efforts".
Markets around the world have fluctuated wildly recently over concerns about how Russia's invasion will lead to higher prices for oil, wheat and other commodities produced in the region, adding to the world's already high inflation.
Mastercard, Visa and American Express have joined the list of companies exiting Russia, as well as Netflix.
The conflict in Ukraine also threatens food supplies in some regions, including Europe, Africa and Asia, which depend on the vast, fertile farmland of the Black Sea region known as the "bread basket of the world".
Wall Street ended last week with shares falling despite a stronger-than-expected report on US jobs. The S&P 500 fell 0.8% to 4,328.87, recording its third weekly loss in the past four. It is now down only 10% from its record set earlier this year.
In currency trading, the US dollar rose from 114.86 yen to 115.08 yen. The Euro is priced at $1.0830, which is less than $1.0926.