The United States has indicated the timeline for imposing new sanctions on Russia: end of May, when Ukraine is to hold presidential elections.

“If in fact we see the disruptions and the destabilisation continuing so severely that it impedes elections on May 25, we will not have a choice but to move forward with additional, more severe sanctions,” U.S. President Barack Obama declared after talks in Washington with German Chancellor Angela Merkel last week.

With Moscow strongly opposed to any elections in Ukraine in the backdrop of Kiev's ongoing military crackdown on anti-government protests in the east, further sanctions appear inevitable.

The first two rounds of Western sanctions have targeted Russian officials and businessmen close to President Vladimir Putin. They had little direct effect on the Russian economy, but spurred an outflow of capital that may total $150 billion in 2014 and increased the cost of borrowing for Russian companies.

According to Professor Alexei Portansky of the Higher School of Economics, Russia’s big companies will feel the pinch later this year, when they face refinancing of their foreign loans to the tune of $103 billion.

Mr. Obama said that the third round of sanctions will penalise selected Russian industries, such as energy, defence and finance, including trade credits.

The U.S. has already introduced restrictions on the export to Russia of high-tech dual-use products and technologies, which currently stands at about $1.5 billion a year.

Experts said the ban will mainly affect Russian research institutions and some high-tech companies, but not the defence industry, which is largely self-sufficient.

The Russian energy sector is unlikely to be targeted by Europe, which heavily depends on Russian supplies. Even Mr Obama admitted that it was “unrealistic” to hope that one could “turn off the tap on all Russian oil and natural gas exports.”

On the day the European Union expanded sanctions against Russian officials last week, Austria’s OMG oil and gas company signed agreement with Russia’s Gazprom to extend South Stream, a natural gas pipeline Russia plans to build across the Black Sea, into Austria.

The threat of sanctions has prompted Moscow to seek greater diversification of its energy exports. When President Vladimir Putin visits Beijing later this month, the two countries are expected to sign a deal on Russian gas supplies to China, which already imports over 15 million tons of Russian oil.

Europe’s business is strongly opposed to sanctions. Last week Germany’s business empires, including BASF, Siemens, Volkswagen, Adidas and Deutsche Bank, issued a warning against escalating sanctions against Russia.

The Kremlin hopes the sanctions will make Russia stronger.

“Thanks to Western sanctions, Russia has been given incentive to reduce dependence from outside and its regional economies will instead be more self-sufficient,” Russia’s Prime Minister Dmitry Medvedev told the Parliament a week ago.

After Visa and MasterCard cut services to two Russian banks affected by U.S. sanctions, Mr. Putin approved a plan to create a national payment system within the next six months.

Even Kremlin critics admit that Russia’s resilience to sanctions may be greater the West’s capacity to maintain them.

“Russia has resources to withstand sanctions for at least three-five years,” said Mikhail Khodorkovsky, former oil tycoon. “Europe should first ask itself whether it is prepared to keen penalising Russia over such a long time.”

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