The US government and EU authorities said over the weekend that they are considering banning Russian oil imports. Shortly after, the ruble dumped by another 10%, while oil prices skyrocketed during early Monday trading hours.
Ruble dumps, oil soars
Following President Putin’s “special military operation” against Ukraine, which turned into an all-out war between the two former Soviet states, the EU and US began to impose sanctions against Russia instead of become directly involved in the conflict.
This resulted in countless western companies leaving the Russian Federation, freezing assets belonging to oligarchs, banning some banks from SWIFT, and others. Oil, though, one of Russia’s largest exports, remains untouched, at least for now.
The situation could change as soon as the EU and the United States said over the weekend that they were in “active discussions” to draw up legislation banning imports of Russian oil.
“We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course, at the same time, maintaining a steady global supply of oil.” – said US Secretary of State Antony Blinken.
Somewhat expectedly, this had an immediate effect on the prices of the affected assets. Oil jumped almost 20% during Asian trading hours, while Brent neared $130 a barrel.
In contrast, Russia’s national currency tumbled once again by another 11% against the dollar. The ruble is down by more than 40% against the greenback since the war broke less than two weeks ago.
But it’s not just the rouble, as almost all European currencies have been affected, especially those operating in the countries closest to the war zone. Over the past month, the euro has fallen about 5% against the dollar.
Will Bitcoin Be Affected?
When the ruble started to plummet initially as the West imposed its sanctions against Russia, the cryptocurrency trading volumes from the world’s largest country by landmass skyrocketed. Shortly after, bitcoin and the alts soared in prices.
While some watchdogs are speculating that the oligarchs can use the asset class to circumvent sanctions, which seems highly unlikely to the CEO of Coinbase and the CEO of Ripple, members of the crypto community believe bitcoin could really help the Russians at a time when their national currency is emptying.
As such, it would be compelling to follow if those crypto trading volumes see a rapid increase in the following days, now that the ruble has lost another sizeable chunk of its value.
