European stock markets managed to push higher on Tuesday despite Russia's top energy official warning that the country could cut off gas flows to Europe through the existing Nord Stream pipeline.
Alexander Novak, Russia’s deputy prime minister, said the Kremlin had "every right" to cut gas flows in response to Germany's halting of the Nord Stream 2 gas link.
The move would significantly dent the continent's supplies as the EU gets about 40% of its gas and 30% of its oil from Russia.
Russia further warned that the price of oil could rocket to $300 a barrel if the western allies step up their economic war against Russia by banning energy imports.
Michael Hewson of CMC Markets said: “In reality, Russia will have to work very hard to be sincere about anything it says given the way it has behaved over humanitarian corridors in the past few days. Throughout the crisis it has lied consistently about its intentions, which means it’s going to be hard to take anything it says at face value.”
Read more: UK faces biggest income squeeze since 1970s
Meanwhile, Shell (SHEL.L) has announced it will cut ties with Russia after it came under fire last week for purchasing a shipment of Russian crude at a record discount.
The oil giant said it will immediately halt all spot purchases of Russian crude oil, and that it would not renew contract terms.
It will now withdraw from all hydrocarbons, including crude, petroleum products, gas and liquified natural gas in a phased manner.
The group will also close its service stations, aviation fuels and lubricants operations in the country. Russian oil currently makes up about 8% of Shell's working supplies.
Elsewhere, Nickel surged past $100,000 a tonne amid a short squeeze on the London Metal Exchange (LME). This week alone, the commodity has jumped by as much as $72,000. The LME suspended trading in nickel on Tuesday.
It comes as UK households will be hit by a cost of living jump larger than anything seen in a generation, according to the Resolution Foundation.
It forecast that a typical household's income will fall by about £1,000 this year once the effect of inflation is accounted for.
Last night, Wall Street suffered its biggest slide in more than a year, as the surge in oil threatens to push inflation even higher and slow the economic recovery.
Watch: US stocks slide, Nasdaq confirms bear market
The selloff pulled the Nasdaq index into a bear market, down 20% from its record high, while the S&P 500 also posted its worst daily loss since October 2020, and its weakest close since June last year — although both remain above their January lows.
Asian markets mostly fell again on Tuesday as investors worried about the economic impact of the Ukraine war.
"With events moving so rapidly, it’s tempting to try and second guess market movements. But investors should try and hold their nerve and look beyond short term events and focus on their long-term goals," Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said.
"Riding out the storm is almost always a good strategy when things start to get rocky. This is the time when the priority should be ensuring they have a diversified portfolio with a wide range of investments across different sectors and geographies."