"Even if a diplomatic solution to the crisis can be found, this may not be enough to prevent Russia from sliding into recession over the first half of this year," according to Neil Shearing, an economist with Capital Economics.
Investors have dumped assets this year as President Vladimir Putin annexed Crimea and massed troops on Ukraine's border, fueling a reprise of Cold War tensions and concern that sanctions could push Russia's slowing economy into reverse.
By annexing Crimea and massing troops on Ukraine's border, the Kremlin has set off a reprise of Cold War tensions that is already having a chilling effect on trade.
On Tuesday, French car maker Renault said it has frozen plans to produce vans with Russian truck maker ZIL due to a weakening of the ruble. Locally-produced cars benefit from the falling currency because they're more competitive when bought with rubles compared to costlier imports priced in strengthening euros, yen or dollars. But the ruble's ongoing slide has also damaged consumer confidence, dampening sales for all car makers.
Other global companies are also pulling back. Japanese banks have withdrawn from deals and suspended credit lines, fearing the west will widen sanctions on Moscow's business elite, according to the Financial Times. Sumitomo Mitsui Banking Corporation and Bank of Tokyo-Mitsubishi UFJ, two of Japan's largest banks, have stepped back from Russia in recent weeks, bankers and executives told the newspaper.
On Sunday, two members of the Senate Foreign Relations Committee said it was time to target industries critical to Russia's economy.
"I think the time is now to rapidly ratchet up our sanctions, whether it's on Russian petrochemical companies or on Russian banks," said Sen. Chris Murphy, D.-Conn. "Yes, there will be economic pain to Europe (under tightened sanctions). But it's time for them to lead as well."
Read More Ukraine accuses Russia of staging fatal attack
So far, the U.S. and European Union have imposed limited sanctions—including travel bans and asset freezes on about 30 close political allies of Putin. The White House is reportedly considering expanding the first round of sanctions by targeting additional individuals and adding specific companies involved in energy production.
Last week, the European Commission briefed member countries on the possible economic and financial impact of tougher sanctions on Russian energy, finance and trade sectors. Those countries have until Tuesday to respond to the proposed measures as the EU formulates its next move. But any European response will be tempered by the Continent's heavy reliance on imports of Russian oil and gas.
Still, Russia's reliance on those energy exports may prove to be an Achilles' heel, say analysts. After a sharp run-up after the global recovery from the Great Recession in 2009, global oil prices have flattened for the last two years. With oil prices stalled, so has Russia's gross domestic product, which fell from 4.5 percent growth in 2010 to just 1.3 percent last year.