HONG KONG, RAW – Oil prices have gyrated and Asian shares have fallen after Ukraine peace talks made little headway and the prospect of a ban on oil imports from Russia triggered investor fears over inflation and slowing economic growth.

President Joe Biden’s administration is willing to move ahead with a US ban on Russian oil imports even if European allies do not, Reuters reported on Monday, citing two people familiar with the matter.

Oil prices have already hit 14-year highs and Russia warned that prices could surge to $US300 a barrel and it might close the main gas pipeline to Germany if the West halts oil imports over the invasion of Ukraine.

MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.4 per cent in early trade, tracking a bruising Wall Street session. Japan’s Nikkei sank 0.3 per cent while Australian shares were down 0.24 per cent amid a sea of red across Asian markets.

Chinese blue chips shed 0.15 per cent while Hong Kong’s Hang Seng index rose 0.39 per cent .

International oil benchmark Brent crude, which briefly hit more than $US139 a barrel in the previous session, jumped around in morning trade on Tuesday and was up about 0.8 per cent at $US124.20.

US crude was up about 0.4 per cent at $US119.86 a barrel, while prices of many other commodities, including nickel, rose as industrial buyers and traders scramble as the Russian-Ukraine conflict shows no sign of cooling.

Russia calls its actions in Ukraine a “special operation”, but the move has triggered sweeping sanctions by the United States and Europe that aim to isolate Russia to a degree never before experienced by such a large economy.

Overnight, Wall Street’s main indices fell sharply with the Nasdaq Composite confirming it was in a bear market. The Dow Jones Industrial Average fell 2.37 per cent, the S&P 500 lost 2.95 per cent and the Nasdaq Composite dropped 3.62 per cent.

The yield on benchmark 10-year Treasury notes rose to 1.7648 per cent compared with its US close of 1.749 per cent on Monday. The two-year yield, which rises with traders’ expectations of higher Fed fund rates, touched 1.5563 per cent compared with a US close of 1.548 per cent.

The rally in oil and other commodities prices will only add to the global inflationary pulse with data this week expected to show the US Consumer Price Index climbed a stratospheric 7.9 per cent on a year-on-year basis in February, up from 7.5 per cent in January.

With the outlook for European growth darkening, the single currency was up 0.1 per cent on the day at $US1.086, after taking a beating and falling 3 per cent last week to its lowest since mid-2020.

The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was up at 99.215.

Gold was slightly lower. Spot gold was traded at $US1,989.3546 per ounce.