Investors are currently bracing for further volatility in the global markets as Russia’s troops have been deployed into eastern Ukraine.

The heightened tensions between Russia and Ukraine reached a tipping point last week when the Kremlin had officially recognised regions in eastern Ukraine held by separatists (supported by Russia). Russia ordered troops to enter Ukraine on a peacekeeping mission.

The western countries have responded promptly, with the UK and US among the first countries to reprimand Russian actions with their first round of restrictive economic sanctions.

The US had unveiled various sanctions targeting Russia, this included limits on sovereign debt and Russia’s two biggest banks, Promsvyazbank and VEB, who both support the military.

A statement from The White House described these measures as the “first tranche of swift and severe costs on Russia” and said the Treasury would “determine that any institution in the financial services sector of the Russian Federation economy is a target for further sanctions.”

Australia also followed the US’s lead and applied sanctions on Russia aimed at the country’s elites and commercial sector, including transport, energy companies and banks.

Investors had a major focus on Energy commodities given Russia’s strong supply of gas to Europe, especially at a time of strong demand and constrained output that has plagued the region for much of the past year.

Here are some thoughts from Vivek Dhar, analyst covering energy commodities for CBA, and Shane Oliver, chief economist for AMP Capital.

Mr. Dhar describes the initial US sanctions as relatively tame given they target sovereign debt, which is low for the Russian economy. Instead, Germany’s decision to suspend the certification of the Nord Stream 2 pipeline poses a more serious response to the escalating situation, given it would have eased the region’s gas shortages.

“The extent of Russia’s incursion will likely see sanctions escalate in turn. A full‑scale invasion of Ukraine certainly opens the door to sanctions on Russia’s oil and gas exports,” he added, which could push the price of oil beyond $US100 per barrel.

Mr. Oliver believes there was a risk Russia could itself cut off supply of gas to Europe, “with a potential flow-on to oil demand at a time when conflict may threaten supply”, adding to anticipated inflation. Investors are worried about a stagflationary shock to Europe and, to a lesser degree, the global economy.

All in all, the crisis between Russia and Ukraine is still ongoing and there will certainly be further actions taken by countries across the world. As investors’ uncertainty slowly rises, the global markets will adjust with every major update. Keeping up to date with other countries’ sanctions and reaction to the invasion can be a rewarding task as opportunities can present themselves.

If you have spotted an opportunity to invest in the global markets and don’t already have a trading account, you can register for an account at GO Markets.