The European Union is reported to be considering restrictions of technology exports for oil and gas exploitation to Russia in a draft list of sanctions drawn up by the bloc to turn up the financial pressure on Moscow over the Ukraine crisis.
The move would include restraints on exports of equipment for Arctic exploration, deep-water drilling and shale gas exploitation, diplomats were quoted as saying by Reuters.
Ambassadors of the 28-nation bloc met in Brussels to discuss options drafted by the executive European Commission in response to the downing of a Malaysian airliner in an area of eastern Ukraine held by Russian-backed separatists.
One of the key proposals would be to bar European investors from buying new debt or shares of banks owned 50% or more by the Russian state. These banks raised almost half of their €15.8 billion ($21.29 billion) capital needs in EU markets last year.
"If implemented such sanctions would be a serious blow to the Russian economy, exacerbating an already very likely recession this year and sustaining an economic depression for longer," analyst Michal Dybula of BNP Paribas was quoted as saying by the news wire.
One EU diplomat, speaking on condition of anonymity, said: "Restricting access to capital markets for Russian state-owned financial institutions would increase their cost of raising funds and constrain their ability to finance the Russian economy.”
The proposed measures, also including an arms embargo, would constitute the EU’s most serious sanctions to date over the Ukraine issue, going beyond previously imposed asset freezes and visa bans on key Russian individuals, although the commission is not proposing a ban on buying Russian government bonds.
Powerful EU states including Germany - Moscow's biggest trade partner - are now pushing for quick action as they believe Russia has consistently failed to meet international demands to end violence in Ukraine.
A spokesman for German Chancellor Angela Merkel said on Wednesday she wanted to see rapid progress at the EU meeting.
Berlin believes the EU could move to impose sanctions on sectors of the Russian economy by the end of July unless Moscow acts quickly to defuse the crisis in eastern Ukraine, an EU source said.
German officials told a closed-door Brussels briefing for industry representatives that Berlin favours a time limit on the duration of new sanctions to provide an opportunity for relations to return to normal, the source said.