After intensive lobbying by US President Barack Obama and Britain’s Prime Minister David Cameron, European Union leaders have agreed the most extensive sanctions yet penalizing Russia for its continued support of separatists in eastern Ukraine.

The pressure will now be on Australia and other G-20 nations to stiffen their sanctions against Russia.

The United States also extended its own sanctions, the New York Times reporting Washington would block future technology sales to Russia’s critical oil industry, while also extending financial sanctions to more Russian banks and individuals. Obama said Russia’s president Vladimir Putin had made a choice to isolate Russia from the international community, “setting back decades of genuine progress”.

The real story, though, is the depth of sanctions agreed by EU leaders after many commentators had written off the prospects of any decisive move. The most detailed report is in today’s Financial Times, which says the new measures represent a major escalation in pressure on Moscow.

The paper says the sanctions will hurt Europe as well as Russia, naming in particular oil major BP which has a stake in oil company Rosneft. The FT’s Moscow correspondent also reports that the Kremlin may well retaliate, suggesting it has drawn up plans for action against the Big Four accountancy firms, who all have a significant presence in Russia.

Canberra will now be reviewing its own move on escalating sanctions, knowing that any escalation involving traded resources is more likely to harm it than Russia. The prime minister has been cautious in responding to calls to block Putin’s attendance at G-20 in Brisbane in November, a move that is not likely to make much of an impression on the Russian leader.