Loud explosions could be heard throughout Ukraine early Thursday, after Russian forces began attacking its smaller neighbor. The long-feared invasion jolted markets, sent energy prices higher, and prompted promises of a new round of consequences on Russia — signals that people even out of immediate harm’s way will be affected by what threatens to become the biggest war in Europe since World War II.

At an emergency meeting of the United Nations Security Council Wednesday night, Ambassador Linda Thomas-Greenfield, the U.S. representative to the U.N., said the U.S. and its partner allies would respond to Russia with “unity, clarity, and conviction.”

In her remarks, Thomas-Greenfield quoted Ukrainian Foreign Minster’s Dmytro Kubelo earlier address to the General Assembly.

“‘No one will be able to sit out this crisis if President (Vladimir) Putin decides that he can move forward with this aggression against Ukraine,'” she recounted. “‘Your governments and your people will face painful consequences together with our government and our people.'”

It echoes a message President Biden made in a speech on Feb. 15. “I will not pretend this will be painless.”

Here’s what to know.

The U.S. and its allies have already imposed targeted sanctions on Russia — and Russia could retaliate

On Tuesday, President Biden announced a “first tranche” of economic sanctions on two Russian banks with about $80 billion in assets, five Russian oligarchs and their families, and prohibited U.S. entities from purchasing Russian sovereign debt.

“We have our next move prepared as well,” Biden said at the time. The White House said it’ll announce Thursday afternoon “further consequences the United States and our Allies and partners will impose on Russia for this needless act of aggression against Ukraine and global peace and security.”

The forthcoming sanctions could include restrictions on major Russian banks that would dramatically affect Russia’s ability to conduct international business. Severe U.S. sanctions could drive up prices for everyday Russians or cause Russia’s currency or markets to crash.

Because the U.S. does not rely much on trade with Russia, it is somewhat insulated from direct consequences. Europe is more directly affected. But certain sectors of the U.S. economy rely on highly specific Russian exports, primarily raw commodities.

“The premise of sanctions is to hurt the other guy more than you hurt your own interests. But that does not mean there will not be some collateral damage,” said Doug Rediker, a partner at International Capital Strategies.

American allies imposed their own initial punishments on Wednesday. Australian Prime Minister Scott Morrison said “Australians always stand up to bullies, and we will be standing up to Russia.” But he cautioned Russia could retaliate against Australia with espionage and cyberattacks, though he said he did not believe any had occurred.

Energy prices rise

In the early hours following Russia’s invasion, Brent crude oil was trading at more than $100 per barrel for the first time since 2014 after Russian forces started their attack, and another benchmark, West Texas Intermediate, rose nearly 5% to more than $96 per barrel.

Russia is a major exporter of oil and natural gas, especially to Europe. As a result, officials have reportedly shied away from severe sanctions on Russian energy exports.

But there are other ways the energy market could be disrupted.

For one, Russia could choose to cut off or limit oil and gas exports to Europe as retaliation for sanctions. Nearly 40% of the natural gas used by the European Union comes from Russia — and no European country imports more than Germany, a key ally of the United States.

Even if Russia chooses not to limit exports, supplies could still be affected by a conflict in Ukraine because multiple pipelines run through the country, carrying gas from Russia to Europe. “They could simply be casualties of a military invasion,” Rediker said.

Either way, if Europe’s natural gas supply is pinched, that could cause energy prices — which have already been climbing — to rise even further. And even though the U.S. imports relatively little oil from Russia, oil prices are set by the global market, meaning local prices could rise anyway.

“There’s a geopolitical premium, or call it a fear premium, in the price of oil,” Daniel Yergin vice-chairman of IHS Markit told Morning Edition. “An expectation that as this crisis spirals worse, that supplies of oil from Russia are going to be disrupted.”

More than a week ago, Biden promised to work with Congress to address “the impact of prices at the pump.” So far, nothing has happened.

Other industries, from food to cars, might also be hurt

Russia is a major exporter of rare-earth minerals and heavy metals — such as titanium used in airplanes. Russia supplies about a third of the world’s palladium, a rare metal used in catalytic converters, and its price has soared in recent weeks over fears of a conflict.

Ukrainian economic output and industry will likely be significantly disrupted. The country is a major source of neon, which is used in manufacturing semiconductors.

As a result, U.S. officials have warned various sectors to brace for supply chain disruptions, including the semiconductor and aerospace industries.

Fertilizer is produced in major quantities in both Ukraine and Russia. Disruptions to those exports would mostly affect agriculture in Europe, but food prices around the world could rise as a result.

Global markets drop

The invasion rattled investors Wednesday, with Dow futures down more than 2% before the markets opened in the U.S. London’s FTSE was set to open about 2% lower. Markets across Asia dropped, with Japan’s Nikkei closing down more than 1.8%. The Hang Seng was in the red more than 3% toward the end of trading.

The invasion sent the prices of traditional investment safe havens higher, with gold up more than 1.5% overnight.

“Markets are fundamentally not prepared for a land war in Europe in the 21st century,” Rediker said. “It’s something people just have not contemplated.”

The U.S. stock market has already been unusually volatile in recent weeks, churning over inflation, moves by the Federal Reserve to curb its stimulus programs, and the looming conflict in Ukraine.

Historically, the market has bounced back relatively quickly after geopolitical events. That’s what’s most likely today too, analysts say, so the effect on people with 401(k) accounts may be short-term.

But if the conflict causes long-lasting disruption of energy markets and other exports, investors could rethink that conventional wisdom.

“You’re potentially at a point where not only are we looking at Russia potentially invading Ukraine and sanctions and countermeasures, but you are also looking at a rise of China that doesn’t necessarily agree with the American perspective on the world anyway,” Rediker said. “Are we looking at a point in which some of the major premises that people take for granted have to be reassessed?”

Russia might respond with disruptive cyberattacks on U.S. targets

Another way Russia could respond to U.S. sanctions is through cyberattacks and influence campaigns.

Various federal agencies, including the Treasury and the Department of Homeland Security, have warned of possible cyberattacks on targets like big banks and power grid operators. And U.S. cybersecurity officials recently held a tabletop exercise to ensure that federal agencies are prepared for possible Russian retaliation, The Washington Post reported.

“They have been warning everyone about Russia’s very specific tactics about the possibility of attacks on critical infrastructure,” Katerina Sedova, a researcher at Georgetown University’s Center for Security and Emerging Technology, told NPR.

Russian cyberattacks have targeted Ukraine relentlessly in recent years, including attacks on the capital city of Kyiv’s power grid in 2015 and 2016. But a major escalation could shift focus to U.S. targets.

Sedova pointed to the Russian state-backed attack on the IT software company SolarWinds and a ransomware attack that shut down the Colonial Pipeline for six days as examples of how major Russian cyberattacks could disrupt U.S. operations. (The Biden administration said it does “not believe the Russian government was involved” in the pipeline attack.)

Power grids, hospitals and local governments could all be targets, she said.

For now, Sedova said she is more worried about subtler attacks — like influence campaigns that aim to “sow discord between us and our allies in our resolve” to act jointly against Russia.

“Oftentimes, cyber-operations go hand in hand with influence,” she said. “They’re targeting a change of decision-making, a change in policy in that direction, a change in public opinion.”

A major invasion would likely spark a refugee crisis

The invasion could send 1 million to 5 million refugees fleeing Ukraine, U.S. officials and humanitarian agencies have warned.

“It will be a continent-wide humanitarian disaster with millions of refugees seeking protection in neighboring European countries,” Agnès Callamard, secretary-general of Amnesty International, said last month in statement.

Poland, which shares a border with Ukraine and is already home to more than a million Ukrainians, would likely see the most refugees. Polish Interior Minister Mariusz Kaminski said his country was preparing for an “influx of refugees” from Ukraine.

The U.S. military says that the thousands of soldiers deployed to Poland this month are prepared to assist with a large-scale evacuation.

“Assistance with evacuation flow is something they could do, and could do quite well. They are going to be working with Polish authorities on what that looks like and how they would handle that,” Defense Department spokesperson John Kirby said this week.

At the largest scale, a refugee crisis would not be contained to Europe — the U.S. would likely see refugees seeking asylum too.

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