Since the Russia-Ukraine crisis escalated last week, much discussion has centered around economic sanctions. With the U.S. and the EU moving to sanction Russian industry, the future of certain sectors remains uncertain, and none more so than the oil and gasoline industry. Oil prices have been rising steadily, sending up the stocks of related companies. But while some oil stocks are rising in the U.S., things aren’t looking so good overseas. Shell (NYSE:SHEL) has been falling all morning amid industry pressure. Its peer BP (NYSE:BP) has announced it will be cutting ties to Russian oil giant Roseneft (OTCMKTS:OJSCY). This news has sent both SHEL stock and BP tumbling.

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BP’s exit of such a prominent international partnership has translated into a significant hit for the company. As of this writing, BP stock has fallen more than 5% for the day. And while SHEL stock hasn’t slipped by that much, declining only 2.5% so far, many eyes are on the European oil giant as it faces pressure to follow BP’s example. Shell has significant holdings in Gazprom (OTCMKTS:OGZPY), one of Roseneft’s state-owned peers. Withdrawing from the partnership would mean a dramatic hit for SHEL stock, as demonstrated by BP’s continuing decline.

Let’s take a closer look at what’s going on with European oil producers and what these companies are likely to do next.

What to Know About SHEL Stock and Russia

1. 1. Just how big are Shell’s Gazprom holdings? The UK’s Evening Standard reports that its stake in the Russian producer’s offshore gas project Sakhalin-2 is more than 27%. The project supplies roughly 4% of the global liquified natural gas market.
   2. It also boasts a 10% stake in Gazprom’s Nord Stream 2, worth roughly $1 billion. The 750-mile undersea pipeline was built to transport gas from Russia to Germany, though it has been halted due to regulatory action from the latter.
   3. BP’s stake in Roseneft was roughly 20%, according to the New York Times. The company has spent more than 30 years doing business with Russia. One of BP’s leaders has stated, though, that the company’s involvement with the warring nation “simply cannot continue.”
   4. Rosneft and Gazprom are among Russia’s top employers. According to the Wall Street Journal, the former has claimed to be Russia’s largest taxpayer. Additionally, it contributes a fifth of the country’s annual budget revenues. Any action against them is significant, primarily because of the hit it means for their international export partners.
   5. Fellow oil giant Equinor (NYSE:EQNR) has also announced it will sever all ties to Russia. This news hasn’t affected shares, which are up 0.5% for the day.
   6. Edward Miliband, UK Shadow Secretary of State for Climate Change, has praised BP for making “the right decision.” The Standard also reports that he has called upon their European peers to take similar action against Russian state-owned companies, singling out Shell by name.
   7. Shell’s only comment has been that it is “monitoring the situation closely” with no further hints as to what it will do.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.