Russia hit by barrage of sanctions as France, US foreign ministers cancel Lavrov meeting

Western nations and Japan have started implementing sanctions against Russia following President Vladimir Putin's deployment of troops into separatist regions of eastern Ukraine. Diplomatic overtures have been suspended and the Nordstream 2 pipeline halted as sanctions could be expanded further if Moscow launches an all-out invasion. 

Europe braces for a massive hike in energy prices over the Ukraine crisis, as Russian President Putin pins his hopes on the West being unwilling to bear the pain of economic sanctions against Moscow. REUTERS - DADO RUVIC

The United States, the European Union, Britain, Australia, Canada and Japan have all announced plans to target banks and elites while Germany halted the major Nordstream 2 gas pipeline from Russia in retaliation to the worst security crisis in Europe for decades.

Bitter about Ukraine's long-term goal to join NATO and claiming it as historic Russian land, Russian President Vladimir Putin has amassed more than 150,000 troops near Ukraine's borders, according to U.S. estimates, and ordered soldiers into the breakaway Donetsk and Luhansk regions to "keep the peace".

The United States has dismisses Moscow's justification as "nonsense".

Over the past 24 hours, satellite imagery shows several new troop and equipment deployments in western Russia and more than 100 vehicles at a small airfield in southern Belarus, which borders Ukraine.

This comes as French Foreign Minister Jean-Yves Le Drian and U.S. Secretary of State Antony Blinken cancelled separate scheduled meetings with Russian counterpart Sergei Lavrov as weeks of shuttle diplomacy failed to end the crisis.

Speaking Tuesday, US President Joe Biden said: "To put it simply Russia just announced that it is carving out a big chunk of Ukraine."

"This is the beginning of a Russian invasion," he added. 

🔴 DIRECT | Conférence de presse conjointe depuis Paris de @JosepBorrellF et @JY_LeDrian à l’issue de la réunion informelle extraordinaire des ministres des affaires étrangères de l’Union européenne#Ukraine https://t.co/OnyTnR1pzg

— France Diplomatie🇫🇷🇪🇺 (@francediplo) February 22, 2022

Meanwhile, Putin still maintains he is open to finding diplomatic solution but that "the interests of Russia and the security of our citizens are unconditional for us."

Moscow is calling for security guarantees, including a promise that Ukraine will never join NATO, while the United States and its allies have offered Putin confidence-building and arms control steps to defuse the stand-off.

This comes as Russian Foreign Minister Sergei Lavrov brushed off the threat of sanctions, saying "Our European, American, British colleagues will not stop and will not calm down until they have exhausted all their possibilities for the so-called punishment of Russia."

• Diplomacy with Moscow has failed as cracks appear in Putin's plans
• Macron says Putin has broken promises, after Russia recognises Ukraine separatist regions

Nordstream 2 on ice as energy prices soar

The most significant measure announced to date has been Germany's suspension of the contraversial €9.7 billion Nord Stream 2 pipeline owned by Russian state-owned gas giant Gazprom, in a move that will significantly raise energy prices across Europe. 

Built and awaiting German approval, the pipeline had been set to ease the pressure on European consumers facing record energy prices but critics including the United States have long argued it would increase Europe's energy dependence on Russia.

Dmitry Medvedev, Russia's former president and now deputy chairman of its Security Council, suggested prices could double. 

"Welcome to the new world where Europeans will soon have to pay €2,000 per thousand cubic metres!" he said on Twitter.

The Kremlin said it hoped the Nord Stream delay was temporary and Putin said Russia "aims to continue uninterrupted supplies" of energy to the world.

German Chancellor Olaf Scholz has issued an order to halt the process of certifying the Nord Stream 2 gas pipeline. Well. Welcome to the brave new world where Europeans are very soon going to pay €2.000 for 1.000 cubic meters of natural gas!

— Dmitry Medvedev (@MedvedevRussiaE) February 22, 2022

Blacklisting Russia's elites and financiers

The European Union has agreed to blacklist banks involved in financing separatists in eastern Ukraine and to cut the Russian government out of its debt markets.

However, Europe's banks - particularly those in Austria, Italy and France - are the world's most exposed to Russia. European lenders hold the lion's share of the nearly €26.5 billion in foreign banks' exposure to Russia.

Britain, for its part, announced sanctions on three billionaires with close links to Putin, and five smaller lenders including Promsvyazbank.

Meanwhile, U.S. sanctions target Russian elites and two state-owned banks, excluding them from the U.S. banking system, banning them from trading with Americans, and freezing their U.S. assets.

They also seek to deny the Russian government access to Western financing.

Biden said that while more sanctions were being prepared in the event of a full-scale Russian invasion, it was critical to ensure such measures did not hurt Americans in the form of steeper energy costs.

On Tuesday, crude oil futures reached their highest levels since 2014.