As the crash site of the downed Malaysia Airlines aircraft that killed 298 people is investigated in Ukraine and fighting rages on between rebels and government forces, international pressure has been mounting for Russia to be held accountable.
EU foreign ministers are meeting on Tuesday and they are expected to discuss further sanctions against Moscow.
“Level three sanctions start to contact industries. So the entire energy and indeed banking sector could get affected. We know certainly from moves that the US have made in New York that the US would see any sanctions being extra-territorial and therefore anybody dealing with Russia is likely to get fined significantly,” said Tom Vosa, Head of Market Economics, Europe at the National Australia Bank Group.
The US, which before last week’s plane crash had already imposed sanctions on some Russian companies and blocked new dollar loans to Russia, has been piling pressure on the EU to impose stricter sanctions.
Among the companies affected is Russia’s government-owned oil giant Rosneft, which has suffered a fall in its share price.
The second largest gas producer in Russia, Novatek, has also been been targeted.
It has claimed its key projects would not suffer any negative consequences.
In the banking sector, Moscow’s third largest bank by assets GazpromBank has claimed US sanctions have had no impact on the stability of its finances and operations.
EU nations rely on Russia for about 30 percent of their gas demand. Excluding Russian pipeline gas exports to the 28 member bloc the Netherlands was Russia’s biggest export destination last year.
EU diplomats have said that sanctions to several sectors would be very difficult for many nations and if they were imposed they would have to agree on ways of sharing the financial burden.