The news has thrown international markets into chaos, and the effects will be felt by ordinary people around the world as the crisis continues. Global stocks fell due to President Putin’s announcement and oil prices rallied, with Brent crude rising more than three percent to close in on $99.50 per barrel – topping a seven-year high.
It later fell to settle at $96.84 a barrel, up 3.5 percent from the previous day.
An oil price of around $100 per barrel is the highest seen since late 2014.
Bastien Drut, chief thematic macro strategist at CPR Asset Management, said: “One of the very few definitive things we can see from this crisis is that energy prices are going higher.
“Even if there is no further escalation in Ukraine, the main consequence is still going to be higher inflation.”
READ MORE: Drivers pay record prices at the pumps
What does this mean for me?
The average price of fuel reached 149p per litre this weekend, but this is expected to rise to a new all-time high of 150p in the coming days – and could rise even further as the crisis continues.
Simon Williams, of the RAC, said: “Russia’s decision to invade Ukraine is already causing oil prices to rise and will undoubtedly send fuel prices inexorably higher towards the grim milestone of £1.50 a litre.
“This spells bad news for drivers in the UK struggling to afford to put fuel in their cars.
The booming cost of energy will also set households back a considerable amount this year, with the energy price cap rising by 52 percent from April.
As Russia is a major oil and natural gas producer, sanctions against the country or willful disruption by Russia in the case of a conflict are expected to lead to energy shortages, meaning prices will go up on the world market.
To make matters worse, the Government is pressing ahead with the rise in National Insurance payments for British workers.