A potential disruption of Russia's delivery of natural gas to Europe would lead to higher prices, energy analysts said in reaction to Russia's incursion into Ukraine.
Russia supplies Europe with about 30 percent of Europe's natural gas, almost half of it through pipelines in Ukraine, and a disruption in the gas supply would cause higher prices, the British newspaper the Financial Times reported Monday.
"Concerns would certainly start to build about supplies and the availability of gas to refill storage through the summer," if a disruption lasted three to four weeks," Richard Mallinson, energy aspects analyst, said.
Natural gas prices in Europe rose sharply Monday in heavy trading, the Financial Times said, on fears Russia would stop exporting natural gas.
The crisis has energy markets worried because a large portion of Russian natural gas for Europe crosses Ukraine. However, the New York Times said, what could keep prices from rising for now is that Russia opened a northern pipeline that bypasses Ukraine, coupled with a warmer winter that allowed European countries to build reserves. On the New York Mercantile Exchange, light sweet crude was up more than $2 to $104.60.
Global prices of wheat and corn, each a major Ukrainian export, also rose, with May wheat up 31.75 cents to $6.34.
Impact was felt throughout Russian markets, the New York Times reported. The Micex index dropped 9.4 percent, and the ruble tumbled to a record low against the U.S. dollar.
Germany's DAX also was hard-hit, dropping by 2.4 percent, the Wall Street Journal reported. Markets were also off sharply in Hungary and Poland, which border Ukraine.
On the New York Stock Exchange, stocks were off more than 160 points to 16,160.20 in mid-afternoon trading.
The turbulence in Moscow markets prompted the Russian Central Bank to announce a "temporary" 1.5 percentage point hike in its benchmark interest rate target to 7 percent, the New York Times said.
On the political front, the Group of Seven condemned Russia's "clear violation" of Ukraine's sovereignty and suspended planning for the June Group of Eight meeting in Russia.
"We, the leaders of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States and the president of the European Council and president of the European Commission, join together today to condemn the Russian Federation's clear violation of the sovereignty and territorial integrity of Ukraine, in contravention of Russia's obligations under the U.N. Charter and its 1997 basing agreement with Ukraine," the G7 statement issued Sunday said.
Russian leaders maintain it is their right and obligation to protect Russian citizens and pro-Russian people in Ukraine, where Moscow ally Viktor Yanukovych was ousted as president two weeks ago, fled Kiev and took refuge in Russia. There have been no verifiable reports of violence against Russians in Ukraine.
"As such, we have decided for the time being to suspend our participation in activities associated with the preparation of the scheduled G8 Summit in Sochi in June, until the environment comes back where the G8 is able to have meaningful discussion," the statement said.
The United States also barred a delegation of Russian health officials from talks that began Monday in Washington, RIA Novosti reported.
The U.S. Embassy notified the delegation's leaders the invitation was withdrawn Sunday before the group's planned departure to the United States to discuss Kazakhstan's potential accession to the World Trade Organization, Russian officials said Monday.
Celebrity Families of 2014 [PHOTOS]