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

The United States and its European allies are set to announce fresh sanctions against Russia on Tuesday after Putin recognized two breakaway regions, the Donetsk People’s Republic and Luhansk People’s Republic, in eastern Ukraine, and have ordered troops to those regions.

“The latest move by Russia has now been priced in. But if troops are crossing the border, we start seeing conflict, then I think the markets have a lot more negativity to price in,” said Craig Erlam, senior market analyst, UK & EMEA, OANDA.

U.S. trading was closed Monday for Presidents Day, but markets in Europe and Asia shuddered after Putin’s decree.

Oil prices already had surged recently to their highest level since 2014. By early Tuesday, the advance of U.S. benchmark crude oil had abated slightly. It was up about $3, or 3.5%, to about $94 per barrel in electronic trading on the New York Mercantile Exchange. The price of Brent crude, the standard for international oils, gained about $4.50, or nearly 5%, to hit about $98 per barrel.

In Asia, Tokyo’s Nikkei 225 index dropped 1.7% to 26,449.61 while the Hang Seng in Hong Kong regained some lost ground to close 2.7% lower at 23,520.00. South Korea’s Kospi lost 1.4% to 2,706.79 and the Shanghai Composite index fell 1% to 3,457.15. Australia’s S&P/ASX 200 lost 1% to 7,161.30.

Germany’s DAX slipped 0.1% to 14,719.16 and the CAC 40 in Paris was flat at 6,788.13. Britain’s FTSE 100 gave up 0.4% to 7,452.18.

U.S. futures were lower, with the contract for the S&P 500 down 0.1% and the futures for the Dow industrials 0.2% lower.

So far, the biggest losses have been in Russia, where the MOEX index was down 3.5% Tuesday after losing nearly 11% on Monday.

The ruble was 2.5% lower.

The turmoil in Ukraine has upped uncertainty at a time when investors already are jittery over how the world’s central banks, especially the U.S. Federal Reserve, will act to counter surging inflation while coronavirus outbreaks fueled by the highly contagious omicron variant cloud the outlook for many countries.

On Tuesday, Germany suspended the approval process for the Nord Stream 2 pipeline that would bring Russian natural gas to Europe.