• U.S. Secretary of State Antony Blinken told NBC on Sunday that Washington is in "very active discussions" with European governments about banning imports of Russian crude.
• Such a move could pose a risk of stagflation — a period of slow economic growth and high unemployment coupled with high inflation — for the global economy.
• Russia has continued to ramp up its assault on neighboring Ukraine in recent days.

LONDON — European stocks fell on Monday after news that the U.S. and European allies are considering a ban on Russian oil imports, posing a risk of global "stagflation."

The pan-European Stoxx 600 index closed down 1.1%, paring back some of its earlier losses. Banks and autos both slid over 3% to lead losses while oil and gas stocks jumped more than 4% as oil prices surged.

Last week, the continental benchmark lost 7% and suffered its worst week since the onset of the coronavirus pandemic in March 2020.

U.S. Secretary of State Antony Blinken told NBC on Sunday that Washington is in "very active discussions" with European governments about banning imports of Russian crude and natural gas.

Such a move could pose a risk of stagflation — a period of slow economic growth and high unemployment coupled with high inflation — for the global economy.

Oil prices surged to their highest since 2008 in response to the news, before trimming gains slightly. International benchmark Brent crude was last seen up 4% to around $122.80 per barrel and U.S. crude was up 2% to around $118.24 per barrel.

Russia has continued to ramp up its assault on neighboring Ukraine in recent days, with forces attempting to advance and isolate the capital city of Kyiv and other major cities while being met with fierce Ukrainian resistance.

Western powers have already imposed a suite of punitive economic sanctions in a bid to isolate Russia from the global economy, but the Kremlin has continued its invasion and Ukrainian President Volodymyr Zelenskyy has urged NATO to implement a no-fly zone on Ukraine, as yet to no avail.

Shares in Asia-Pacific closed sharply lower on Monday, with Hong Kong's Hang Seng index dropping almost 4% to lead regional losses. On Wall Street, the major U.S. averages sank on fears of a global economic slowdown.

In terms of individual share price movement, Austrian bank Erste Group fell more than 9% to the bottom of the Stoxx 600.

The London Stock Exchange cancelled trades on shares of Anglo-Russian miner Polymetal International over a 20-minute period on Monday morning following a sudden surge sent the share price skyrocketing. Polymetal shares were up 32% by mid-morning.

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- CNBC's Ryan Browne contributed to this report