A monument to Ukrainian poet and writer Taras Shevchenko is silhouetted against an apartment building with a sign advertising Russia's natural gas giant Gazprom, in Moscow. — A monument to Ukrainian poet and writer Taras Shevchenko is silhouetted against an apartment building with a sign advertising Russia’s natural gas giant Gazprom, in Moscow. Photograph: Alexander Zemlianichenko/AP

Russia’s largest banks, oil producers and defence companies will be cut off from international finance and technology under sweeping new economic sanctions announced by the US and Europe that substantially escalate western political pressure over Ukraine.

In coordinated moves that may unnerve already jittery financial markets, the US Treasury and European Union announced on Friday that Russia’s largest bank, Sberbank, would be barred from accessing their capital markets for any long-term funding, including all borrowing over 30 days.

Existing 90-day lending bans affecting six other large Russian banks will also be tightened to 30-days, something US officials claim will sharply increasing their borrowing costs and deny access to important dollar-denominated funding sources.

Even more draconian measures were imposed on the Russian energy industry, where the US and Europe are attempting to shut down important new exploration projects in Siberia and the Arctic by barring foreign oil companies from providing any equipment, technology or assistance to deepwater, offshore, or shale projects.

The bans will prevent previously active companies such as Exxon and Shell from dealing with five of the largest Russian oil producers and pipeline operators: Gazprom, Gazprom Neft, LukOil, Surgutneftegas, and Rosneft.

The surprisingly far-reaching measures came despite tentative signs of diplomatic progress over Ukraine following a fragile ceasefire agreement.

One senior administration official in Washington claimed the measures were in response to recent incursions by Russian troops and were “about restoring respect for international law and state sovereignty”.

Russian President Vladimir Putin — President Vladimir Putin, who maintains that Russian active military are in no way involved in the violence in Ukraine. Photograph: Mikhail Klimentyrv/Ria Novosti/EPA

Another US official told reporters in Washington that the bans would would only be reversed if Moscow agreed to 12 measures set out in the so-called Minsk agreement, including withdrawing all its troops and equipment from Ukraine.

“The United States, in close cooperation with the European Union, will impose ever-increasing sanctions that further Russia’s isolation from the global financial system unless Russia abandons its current path and genuinely works toward a negotiated diplomatic resolution to the crisis,” said the Treasury department’s under secretary for terrorism and financial intelligence, David Cohen in a separate statement.

The moves brought a dismissive response from Russia’s president Vladimir Putin, who has already retaliated to earlier sanctions by banning food imports from Europe and the US.

“The less time officials and business leaders spend overseas and the more time they spend dealing with current issues the better,” said Putin.