The European Union (EU) and the US are poised to impose a new set of heavier sanctions on Russia that will include restrictions on certain sectors including banking and energy.
The new measures will undoubtedly impact businesses that have dealings with Russia, with BP on Tuesday warning that the sanctions "could adversely impact our business" due to its near-20% stake in Russian oil firm Rosneft.
Ambassadors from the EU's 28 member states are meeting in Brussels with the aim of bringing new measures into force within 24 to 48 hours, with the White House pledging to fully coordinate with Europe and strengthen its existing trade sanctions.
Measures against Russia are expected to include restrictions on Russian banks accessing European markets and on dealings and technology-transfer with the energy sector, as well as an arms embargo. Previous sanctions against individuals are also to be stepped up, with assets freezes and and visas revoked.
An agreement to implement new tougher measures was made during an extraordinary five-way teleconference held between UK Prime Minister David Cameron, US President Barack Obama, Germany's Angela Merkel, François Hollande of France and Italy's prime minster Matteo Renzi.
A statement from the Cameron's Downing Street office said: "Leaders agreed that the international community should...impose further costs on Russia and specifically that ambassadors from across the EU should agree a strong package of sectoral sanctions as swiftly as possible."
The stepping up of sanctions has been prompted buy Moscow's continuing to support Ukrainian separatists even after they shot down the MH17 civilian flight from Netherlands to Malaysia, as well as concern that Russia could step up its cross-border intervention in Ukraine.
A Downing Street spokesperson also told reporters: "The latest information from the region suggests that even since MH17 was shot down, Russia continues to transfer weapons across the border and to provide practical support to the separatists."
A further shot across Russia's bows comes in the form of a Nato military exercise in Poland planned for October, according to The Guardian, with countries including the UK sending troops to take part in a military display called Exercise Black Eagle. Britain is contributing more than 1,300 soldiers.
Russia has said it would not engage in "tit-for-tat" sanctions, though reports suggest it was considering the possibility of targeting EU and US agricultural trade through its food safety agency, including chicken and other imports.
The potential for the tension in the region to dangerously escalate into a larger conflict is a "real danger", according to former US Deputy Secretary of State, Strobe Talbott. The Clinton administration veteran saw "disturbing and troubling" the parallels between 1914 and 2014 because of other tensions in Asia and the Middle East.
Talbott, president of the Brookings Institution thinktank, told El País in Spain that there is "a danger of conflict in Europe".
A note from Citi suggested the EU may target Russian banks, limiting access to new issuances of EU debt and equity, in line with current US sanctions, while the US may extend its July 16th financial sanctions to other entities outside of Gazprombank and VEB.
"The sanctions are likely to have force now that the Russian economy and financial system have become so interdependent with the global economy, a situation that didn't exist during the Cold War period," Citi analysts wrote.
They added that the impact on the energy sector should be minimal in the short term, but could be significant in the long term as sanctions may include previously touted 'scalpel sanctions' limiting high-technology transfers which could affect Arctic, deep water, LNG and shale/tight oil development in Russia.
The political implications of the escalation in tensions are likely to further chill relations between Russia and the West, but the analysts do not expect the key variables in this dispute to dissipate due to Russia's self-touted capacity for self-reliance.
"The Ukrainian government ground offensive against the rebels in southern and eastern Ukraine is likely to continue, as is the continuation of Russian support for rebel efforts, as has been widely documented by media and government sources.
"Although the latest sanctions increase the costs for Russia, Russia's perceived national security interest calculus should not change meaningfully as a result. If anything, official Russian government statements have emphasized Russia's capacity for self-reliance.
"Economic costs are starting to bite, but it could be a while before the economic consequences bear domestic political costs for Russia."