Oil prices surged nearly 5% and stock prices dropped
after Russian President Vladimir Putin ordered forces into separatist regions
of eastern Ukraine, bringing a long-feared invasion a step closer.

Also Read: In Ukraine’s volatile east, a day of shelling, outages, fear

Russia is a major energy producer and the tensions
over Ukraine have brought wide swings in volatile energy prices, on top of the
inevitable risks of a broader conflict.

Oil prices already had surged recently to their
highest level since 2014. By early Tuesday, U.S. benchmark crude oil had
advanced 4.9% to $94.64 per barrel in electronic trading on the New York
Mercantile Exchange. The price of Brent crude, the standard for international
oils, jumped 3.9% to $99.07 per barrel.

Also Read: Allies watch for Kremlin attempt to justify Russia’s Ukraine invasion

U.S. markets were closed Monday for Presidents Day,
but markets in Europe and Asia shuddered as Putin moved to secure Russia’s hold
on Ukraine’s rebel regions, adding to fears of a full-scale invasion.

Those actions have undermined hopes for averting a
conflict that could cause massive casualties, energy shortages on the continent
and economic chaos around the globe.

Also Read: UK intelligence claims Russia could invade Ukraine without further warning

The U.S. and European Union condemned Russia and
prepared to hit President Vladimir Putin’s administration and supporters with
sanctions. Western powers have feared Russia might use skirmishes in Ukraine’s
eastern regions as a pretext for an attack on the democracy, which has defied
Moscow’s attempts to pull it back into its orbit.

Russian President Vladimir Putin received no support
from members of the U.N. Security Council at an emergency meeting Monday night
for his actions to bring separatists in eastern Ukraine under Moscow’s control.

Also Read: Ukraine crisis: Blinken urges Russia to ‘abandon path of war’ at UNSC

Germany’s DAX slipped 0.9% to 14,604.98 and the CAC 40
in Paris lost 0.6% to 6,747.97. Britain’s FTSE 100 gave up 0.4% to 7,452.18.

U.S. futures were sharply lower, with the contract for
the S&P 500 down 1% and the future for the Dow industrials 0.9% lower.

Also Read: Joe Biden says invasion of Ukraine due in ‘days’ as Russia responds to NATO

So far, the biggest losses have been in Russia, where
the MOEX index was down 5.4% early Tuesday after losing nearly 11% on Monday.

Also Read: Russia threatens ‘military-technical’ response after expelling top US diplomat

The ruble was 2.5% lower.

“The current situation is tightening financial
conditions for Russian companies, destabilizing markets and reducing business
predictability,” Elena Nazarova of FxPro said in a commentary.