Here's how Russia-Ukraine tensions are contributing to market volatility as the threat of war in Europe looms over investors

• Energy and metals prices stand to extend gains if ongoing tensions between Russia and Ukraine lead to supply shortages, analysts said.
• Russia has been amassing thousands of troops near Ukraine's border for weeks.

Prices for oil and metals stand to extend this year's gains on the back of a growing conflict between Russia and Ukraine that has also drawn in the US and its European allies.

Fears that Russia will invade Ukraine have been mounting for weeks, contributing to the recent stock market volatility. The tensions ramped up sharply on signs of more escalation. Russia has been amassing thousands of troops and artillery at Ukraine's border. And the Pentagon has put 8,500 troops on alert to deploy to Europe, while US officials threaten dire consequences if Russia invades.

The "uncertainty about the outcome of current tensions between Russia and Ukraine," has also been a source of downward pressure on equities, Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note published late Monday after US stocks staged a remarkable swing higher.

He noted that Russia's invasion of Crimea in 2014 had a limited effect on global markets. But key commodities face outsized exposure to a conflict.

Oil and Gas

Russia is a top producer of oil. Prices for Brent crude and West Texas Intermediate crude recently marched up highs not seen since October 2014 as fears of a war grow.

Haefele said "disruptions to oil and gas supplies, at a time when the supply-demand balance in the market is already tight, could trigger much higher prices in the short-term and disrupt global economic activity."

Brent oil prices could soar to $150 a barrel during the first quarter if an eruption in tensions between Russia and Ukraine leads to a supply shock, economists at JPMorgan said last week.

Russia is also a major supplier of natural gas. Western nations have threatened sanctions if Russia invades Ukraine. And a suspension of the Nord Stream 2 gas pipeline is possible, which could trigger cuts in gas to Europe, Thomas Hempell, head of macro & market research at Generali Investments, said in a Tuesday note.

Metals

Meanwhile, platinum group metals, notably palladium, were poised to gain from the geopolitical tensions, said HSBC.

"Russia is the world's largest exporter of palladium and second-largest exporter of platinum, and even a low probability of trade interruptions is bullish," James Steel, chief precious metals analyst at HSBC, said in a note last week.

Palladium prices have climbed about 15% this year through mid-Tuesday and platinum has advanced by nearly 7%.

The ongoing tensions have also supported haven demand for gold, and silver has recently pressed higher, he added.

Grains

Russia is the biggest exporter of wheat in the world, and Ukraine is projected to be No. 4 in wheat and No. 3 in corn exports, according to International Grains Council data cited by Reuters.

The two countries, along with Kazakhstan and Romania, also ship grain from ports in the Black Sea, which could be a major flashpoint as the US faces off against Russia.