Surging inflation from Russian sanctions could see a blow out in prices within the economy and place added pressure on the central bank to move on interest rates.
Economists are expecting rising fuel costs and increases in the cost of food will drive up prices in Australia, with potential secondary effects on inflation and current interest rates set by the Reserve Bank.
This week alone Brent oil prices surged to nearly $US140 following speculation of an energy war erupting between the west and Russia.
The price spike was fuelled by the US urging its allies to ban Russian oil imports, sparking threats by Russia it could cut off gas pipelines which make up 40 per cent of Europe's gas supplies.
Countries around the world are uniting over the need to take concrete steps to cut reliance on Russian oil even if that is difficult for some in Europe, British Prime Minister Boris Johnson says.
The UK earlier said it would phase out Russian imports of oil and oil products by the end of 2022 and the United States has announced a ban on such imports over Russia's invasion of Ukraine.
Price pressures are also hitting the Australian agriculture sector, as both Russia and Ukraine are two major exporters for wheat and grains.
ANZ head of Australian economics, David Plank believes the rise in fuel prices will impact the country's consumer price index data for at least the next two quarters.
Upward inflationary pressure could impact the RBA's timeline to lift the cash rate from 0.1 per cent, which would flow on to a faster rise in interest payments on mortgages.
"The question is whether this inflation shock and potential growth shock brings a rate hike forward," Mr Plank said. "The first quarter CPI could be potentially so strong that they feel their room to manoeuvre is much less than first thought. I don't think it will play out that way but I would not rule it out."
The RBA's inflation target band to lift rates is between 2 to 3 per cent, with the most recent CPI data printing an annual headline inflation rate of 3.5 per cent.
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ANZ has already downgraded its economic outlook for European economies by 1 percentage point in light of the Ukraine crisis.
The Greens have called on the federal government to boycott Russian oil imports.
Parliamentary library statistics show Russian crude imports for the 2022 financial year reached $86.1 million.
The nation's total crude imports for the year were $6.36 billion.
Russia's oil reserves make up around 8.5 per cent of global supply.
It is also the major supplier of gas to Europe.
Greens leader Adam Bandt said Russia's financing of its attack on Ukraine is being fuelled by continuing ability to sell oil and gas freely.
"Russia is a petrostate and Putin's power comes from oil and gas," he said.
"We need to get serious about sanctions.
"By buying Russian oil, countries like Australia are helping fund the invasion."
On Tuesday, Foreign Affair Minister Marise Payne unveiled additional sanctions upon Russia to target disinformation and propaganda coming out of the Kremlin.
Ms Payne said financial sanctions will now be placed on the Armed Forces of the Russian Federation and a further six military commanders would be hit with financial restrictions and travel bans.
"Russia's invasion of Ukraine has been accompanied by a widespread disinformation campaign both within Russia and internationally," she said.
"This includes driving and disseminating false narratives about the 'de-Nazification' of Ukraine, making erroneous allegations of genocide against ethnic Russians in eastern Ukraine, and promoting the recognition of the so-called Donetsk People's Republic and Luhansk People's Republic as independent."
Westpac Economics also flagged further price pressures are likely to occur in the coming months as financial sanctions begin impacting global supply chains.
The bank's comments coincided with NAB's monthly business survey which showed confidence and conditions rose in February compared to the prior month.
Respondents to the survey did note significant price pressures and labour costs were being felt as a result of import constraints and COVID-19 disruptions.
