The EU is preparing new sanctions on Russia despite a potential meeting between Vladimir Putin and Volodymyr Zelenskyy on Thursday, three sources told CNBC.

The Russian economy is in an increasingly precarious state as a result of a shift to a war mode and of Western sanctions over Moscow's invasion of Ukraine, a report by the Stockholm Institute of Transition Economics (SITE) said on Tuesday.

European Council President António Costa has criticized the trip by Serbia's president to Russia’s Victory Day parade last week.

Russia's friends in Eastern Europe say EU plans to end all Russian gas and energy imports are tantamount to "economic suicide" and a threat to energy security.

But if it does not and there was even a “modest” return of Russian pipeline gas to Europe, alongside imports from Russia’s gas facility Arctic LNG 2, which has been subject to US sanctions, S&P warns that $120bn of investment in the US industry would be at risk.

The new round of negotiations comes amid a long history of delaying tactics by the Russian side as the fighting in Ukraine grinds on.

The leader of a British-based Russian spy ring which prosecutors said carried out surveillance for the Kremlin was sentenced in a London court on Monday to nearly 11 years in jail, as his five team members were jailed for a total of about 40 years.

The Kremlin brushed off the threat of further sanctions, saying that “the language of ultimatums is unacceptable.”