The price of crude oil dropped sharply Tuesday after a big jump the day before over concern that Russia's military advance into Ukraine could result in economic sanctions against one of the world's major energy suppliers.
By early afternoon in Europe, benchmark U.S. crude for April delivery was down $1.58 to $103.34 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract added $2.33 to close at $104.92.
Brent crude, used to set prices for international varieties of crude, was down $1.83 at $109.37 a barrel on the ICE Futures exchange in London.
Russian troops have taken control of all Ukrainian border posts on the strategic peninsula of Crimea. There were fears that the Kremlin might carry out more land grabs in pro-Russian eastern Ukraine, adding urgency to Western efforts to defuse the crisis.
Still, the West appeared to have limited options. The clearest weapon at the disposal of the EU and U.S. appeared to be economic sanctions that would freeze Russian assets and scrap multi-billion dollar deals with Russia.
On Tuesday, Russian President Vladimir Putin pulled his forces back from the Ukrainian border but said Moscow reserved the right to use all means to protect Russians in Ukraine. He accused the West of encouraging an anti-constitutional coup in Ukraine and declared that any sanctions by the West against Russia would backfire.
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