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Shell is working with Gazprom on natural gas extraction in Russia; Exxon has a multibillion dollar exploration partnership with Rosneft, a major oil producer controlled by the Russian government, and BP owns nearly 20 percent of Rosneft.

"Shell and Exxon have physical assets in Russia," said Gheit. "But pound-for-pound, BP has the biggest exposure in Russia." Although BP may have the most to lose from an economic tug-of-war between Moscow and the West, tough lessons that BP learned in Russia—through a defunct partnership with Rosneft called TNK-BP—also make BP best equipped for any future fallout, said Nicholas Spiro, managing director of Spiro Sovereign Strategy.

Spiro said that several German firms have also steeled themselves for possible fallout from friction between the Russia and the West. "German companies are huge here," said Spiro, naming BASF, energy firm RWE, and Siemens as companies with operations in Russia. BASF is working to finalize a deal with Gazprom that would give it a stake in Siberian oil fields; RWE has reached a preliminary deal to sell its natural gas subsidiary to Russian billionaires Mikhail Fridman and German Khan, and Siemens has a partnership with state-run railroad monopoly Russian Railways. Late last month, Siemens CEO Joe Kaeser made a trip to Moscow to meet with Russian President Vladimir Putin at his residence and voice support for a "trusting relationship" with Russian companies.

We know that if the West's resolve starts to crumble, it will almost certainly start in Germany,

"That's the canary in the coal mine."

"It starts with Germany and works its way down," said Hogan. "They have the most trade back-and-forth, and Germany gets the highest percentage of its energy from Russia."

Alcoa owns aluminum fabrication facilities in Russia, and Boeing has a design center in Moscow, as well as a joint venture with VSMPO-Avisma, the world's largest titanium producer.

Members of the Russian parliament have also proposed charging international payments companies like Visa and Mastercard with pre-emptive "security fees," with the stated aim of preparing for future financial disruptions.

As of mid-April, Moldovans can travel visa-free to the E.U. Transnistria residents who have Moldovan passports also will benefit.

For years, Gazprom offered successive Ukrainian governments what it called discounts on the fuel, only to continue charging Naftogaz more than other European utilities.

Even with the rent for the Sevastopol naval base deducted from the price of gas, Gazprom had charged Naftogaz $395 to $410 for every 1,000 cubic meters of natural gas, for most of 2013. By comparison, Gazprom’s average price in Western Europe for the first nine months of last year was $380 for the same volume.

Nikos Chountis, Greece's deputy foreign minister, said on Tuesday that Russia and China had already offered financial support to the country.

Cyprus has already caused a political storm by offering to expand Russian access to its ports and airfields – including “military facilities” - though it has stopped short of offering full military bases.

The goal is to be able to ship gas to Ukraine at an annual rate of more than three billion cubic meters by the time the heating season begins in the autumn, increasing the flow to up to 10 billion cubic meters annually by next spring. Last year Ukraine imported nearly 30 billion cubic meters of gas, according to a recent report by the Oxford Institute for Energy Studies.

Part of his message is that, even though gas demand in Europe has been weak because of sluggish economies, imports from Russia actually rose last year by about 16 percent as other sources of supply including Norway and Algeria declined. Europe, he warned, is simply not prepared to do without gas from Russia.

But with the gradual introduction of more competitive pricing in the European markets, the gas business has become much less attractive for ENI and other big gas middlemen. They are stuck with high-priced long-term contracts to a handful of suppliers like Gazprom and Sonatrach, the Algerian state-owned company, while their customers are able to secure gas at often lower spot market prices — assuming the gas is flowing.

The pipeline would be a major new source of Russian gas for energy-hungry Europe. But European Union authorities have become deeply skeptical about the South Stream plan, seeing it as just another way of making Europe more dependent on Russian energy.

hose outages in 2006 and 2009 are a top reason that the European Union had already been trying to chip away at Europe’s dependence on Russia even before the Crimea annexation.

That is partly because powerful Eastern European countries like Poland argue that such clean-energy policies would impede their ability to reduce Russian dependence by mining more coal or developing their own shale gas resources.

nd this month, the European Commission issued rules aimed at reducing the subsidies that governments use to support the wind and solar industries,

they would help inoculate European economies against the adverse effects of energy disruptions in the medium term.

Consideration should be given to invoking GATT Article XXI, which provides exceptions for national security reasons from rights and obligations under the World Trade Organization (WTO), for example. Invoking this WTO exception would allow across-the-board actions against Russia without prior notification or even justification. The national security exception of Article XXI is that broad. In brief, the United States and the European Union could remove in one step all the WTO benefits they accorded Russia when it acceded to the WTO in August 2012. Doing so would disrupt bilateral trade and investment, possibly kicking tariffs back up to Smoot-Hawley levels of the 1930s.

These figures are in line with earlier research carried out by the Royal United Services Institute which projected that UK defence spending could fall to about 1.7% of GDP by the end of the decade.

Nato has already set a target that member states should each spend a minimum of 2% of their national income or GDP on defence.

Contrast that with Russia's defence spending, which is rising from 3.4% of its GDP this year to 4.2% next year ($81bn or £52.2bn). Russia is also stepping up its military activity. A separate report by Ian Brzezinski for the Atlantic Council says there is also an "exercise gap" between Russia and Nato. Since 2013 Russia has conducted at least six military exercises involving 65,000-160,000 troops.

Europe depends on Russia for about 40 percent of its imported gas, most transmitted through Ukraine.

The appearance of imported cheap liquefied natural gas on the European market from Qatar and reduced demand have already led Gazprom to negotiate cuts of about 10 percent in contracts with Western European utilities,

Another potential sticking point is Turkey itself. For one thing, the country obtains about 60 percent of its gas from Russia, a dependence the government is not necessarily eager to increase.

Industry analysts estimate that the cost of Turkish Stream would be about $10 billion for Gazprom, which so far has spent an estimated $4.7 billion on the Black Sea project.

Mr. Putin already publicly offered a 6 percent reduction to Turkey. But Ankara, which pays substantially more for Russian gas than Germany does, is pressing for a better deal.

Russia accounts for 13 percent of Ukraine's iron and steel exports, and the political crisis has already hit shipments from Ukrainian steelmakers this year.

Sales of rebar - a steel bar or mesh of steel wires used in reinforced concrete - to the Commonwealth of Independent States (CIS), a bloc of former Soviet states, fell 70 percent to 45,000 tonnes in January compared with the average monthly export figure in the first half of 2013.Russian steelmakers have aggressively lobbied their government to implement measures to defend domestic producers from Ukrainian imports.

Tough competition on the international steel market makes the chance of (steelmakers) expanding their export market presence very low," Eavex Capital metals analyst Ivan Dzvinka said in Kiev

Manufacturers of train carts and turbo engines, which together account for 2.5 percent of Ukraine's total exports, will be hit particularly hard.

"Re-orienting these industries to Europe would be nearly impossible without very heavy investment,

"The point of the FTA is not to make it possible for Ukraine to export Soviet-era tractors to Europe. That's not going to happen. But it could eventually lead to Ukraine becoming a producer of Peugeots, Volkswagens, fridges or Nokia telephones," the EUISS's Popescu said.

But three years later, the same row erupted again: Gazprom demanded a price hike to $400-plus from $250, Kiev flatly refused, and on New Year's day 2009, Gazprom began pumping only enough gas to meet the needs of its customers beyond Ukraine.

Again, the consequences were marked. Inevitably, Russia accused Ukraine of siphoning off supplies meant for European customers to meet its own needs, and cut supplies completely

several countries – particularly in south-eastern Europe, almost completely dependent on supplies from Ukraine – simply ran out of gas.

Bulgaria shut down production in its main industrial plants; Slovakia declared a state of emergency

Many industry experts, though, point out that the world has changed since 2009, and that there are any number of reasons why Moscow's natural gas supplies may not prove quite the potent economic and diplomatic weapon they once were.

higher than normal temperatures are forecast to continue for several weeks yet, significantly reducing demand for gas and leaving prices at their lowest for two years

since the first "gas war" of 2006, many European countries have made huge efforts to increase their gas storage capacity and stocks are high. Some countries, such as Bulgaria, Slovakia and Moldova, which lack large storage capacity and depend heavily on gas supplies via Ukraine, would certainly suffer from any disruption in supplies

New Gazprom pipelines via Belarus and the Baltic Sea to Germany (Nord Stream) have cut the proportion of Gazprom's Europe-bound exports that transit via Ukraine to around half the total, meaning only about 15% of Europe's gas now relies on Ukraine's pipelines. Gazprom is also planning a Black Sea pipeline (South Stream), expected in 2015, meaning its exports to Europe will bypass Ukraine completely. Ukraine itself has cut its domestic gas consumption by nearly 40% over the past few years, halving its imports from Russia in the process.

Europe is increasingly installing specialist terminals that will allow gas to be imported from countries such as Qatar in the form of liquefied natural gas – while Norway's Statoil sold more gas to European countries in 2012 than Gazprom did. "Since the Russian supply cuts of 2006 and 2009, the tables have totally turned," Anders åslund, an energy advisor to both the Russian and Ukrainian governments, told the Washington Post.

Europe accounts for around a third of Gazprom's total gas sales, and around half of Russia's total budget revenue comes from oil and gas. Moscow needs that source of revenue, and whatever Vladimir Putin's geo-political ambitions, most energy analysts seem to agree he will think twice about jeopardising it.

Germany is the second-largest foreign investor in Ukraine behind Cyprus, which is a transit point for Russian money.

“Germany in particular is dependent on Russian gas,”

“I definitely expect that things will get worse,” he said.

The European Union exported agricultural goods worth 11.8 billion euros, or $15.8 billion, to Russia last year, and sales have been rising at a rate of almost 15 percent a year.

The economic data and news that Russia was massing troops and military equipment on the Ukrainian border caused stock prices to fall across Europe on Wednesday.

Separately, the German Federal Statistical Office reported on Wednesday that new industrial orders in Germany fell 3.2 percent in June compared with May. Analysts had expected orders to increase.

For Italy, the deteriorating economy puts greater pressure on Prime Minister Matteo Renzi, who less than a week ago promised not to impose any more government budget cuts and to invest in improving the country’s roads and other infrastructure. Such promises will be difficult to keep if slower growth, which usually translates into higher unemployment and lower corporate profits, limits tax receipts.A slower economy also endangers Italy’s ability to comply with eurozone rules on budget deficits.

Italy’s 2.1 trillion euro government debt equals 136 percent of its annual gross domestic product, the second-highest debt ratio in the eurozone, after Greece.

They said Italy’s problems stemmed more from its failure make changes needed to improve the performance of its economy.

The slow pace of structural reforms is worrisome,” said Paolo Manasse, a professor of macroeconomics at Bologna University. He said there was no sign of progress on necessary steps like selling off state-owned assets or overhauling the labor market or public pension system.

"There's no risk to Polish clients," PGNiG spokeswoman Dorota Gajewska said, but added that it was forced to suspend its so-called "reverse flow" transfers to Ukraine.

The move caused the Russian ruble to plunge to another record low against the dollar on Thursday.

"It also can be seen as a kind of response to EU sanctions, targeting the smaller EU members in Moscow's former sphere of influence, not its larger Western partner." "But it's a risky policy, as it further undermines Moscow's credibility in Western Europe. It's not the best idea: either you're a reliable supplier of gas or you're not," he said.

The third principle is that the ban on exports of dual-use technology, which applies to military and civilian products, will for now be limited to military end-users.