All state-controlled Russian oil and defense companies will be restricted from raising funds in the European capital markets.
Following a call for stronger sanctions by the EU leaders, the EU will finalize a draft of new measures by Friday.
The sanctions, however, will be applied to only to state-controlled companies that have assets of more than $27bn as well as on defense companies, Financial Times reported.
According to EU draft papers: "[To] prohibit debt financing (through bonds, equities and syndicated loans) to defence companies and to all companies whose main activity is the exploration, production and transportation of oil and oil products and in which the Russian state is the majority shareholder."
A senior EU diplomat told The Telegraph: "(Russian President Vladimir) Putin underestimates the strength of European unity and determination. It is never going to be business as normal again."
Reuters cited the US ambassador to EU Anthony Gardner as saying that: "We are looking at further tightening of restrictions on energy exports and the licensing of hi-tech exports, not only to the energy sector but specifically to Arctic oil and gas."
Russia, which is the primary energy supplier in the EU, has some of the largest undiscovered oil and gas reserves in the world.
The sanctions may endanger its energy ambitions.
Last month, the largest banks of Russia were imposed with a ban on raising funds in the European capital markets.
