Energy is a key piece of an advanced society. That's why the European Union is doing everything it can to avoid creating its own energy shortfall by upsetting Russian oil and natural gas supplies. If the flow of either of those products stopped, even for a brief period, Europe would have a much harder time keeping the lights on and its cars running.

All bark, no bite
Earlier sanctions imposed on Russia had the potential to dent the country's giant oil businesses, such as Rosneft. Roughly 60% of this company's first-half energy sales went to Europe (although predominantly oil, the company has a comparatively small natural gas operation). The company controls around 40% of Russia's overall oil production. And because of earlier sanctions limiting loans to Russian oil companies, it was reportedly forced to ask the Russian government for a $42 billion loan.

However, the long-term impact on the oil industry from the sanctions was somewhat muted because it didn't impact Russian oil deals signed before August. That's why ExxonMobil (NYSE:XOM) was able to go ahead with a Russian drilling program with Rosneft -- and why Germany approved the sale of RWE (NASDAQOTH:RWEOY) oil and gas assets to Russian Mikhail Fridman for some $7 billion.

Meanwhile, the sanctions didn't touch natural gas at all. No wonder, since Russian natural gas supplies about 30% of Europe's needs. And now, the latest round of sanctions, all tied to Russia's involvement in Ukraine, have been put on hold. This currently in-limbo slap on the wrist again avoided natural gas, aiming instead at oil by further limiting Russian access to outside funding. But the recent ceasefire between Russia and Ukraine has basically allowed a divided Europe to step back from the increasingly close, and risky, energy edge.

The cliff
The problem Europe faces is that it imports roughly 85% of its natural gas and more than half of its oil. Purposely disrupting the relationship with one of the largest suppliers of both would instantly plunge the region into an economic malaise or worse. And while the United States would be happy to impose further sanctions, pushing for Europe to follow along, Russia and the United States don't have the same energy relationship. It's easier to impose a sanction when the fallout will be minimal.

So, Europe is taking a wait-and-see approach. But even if the sanctions are imposed, oil will still flow out of Russia -- it will just have to travel by boat. And since natural gas is excluded (it's largely moved by pipe), Russia will still be able to sell Europe gas. That's a good thing for Gazprom OAO (NASDAQOTH:OGZPY), which gets about half of its top line from Europe.

Time to diversify...
What the sanction situation may actually wind up doing is refocusing Europe on energy security. If it is so reliant on its relationship with Russia, tense in the best of times, it has a problem. However, there are only so many places it can go, since dealing with the Middle East isn't much better. This is why Europe has been pushing the United States to soften its energy export restrictions.

Essentially, Europe wants the United States to share some of the energy security that its oil and natural gas drilling "renaissance" has provided. Which, of course, would be good for international oil and gas companies with U.S. operations, like Exxon, BP (NYSE:BP), and Shell (NYSE:RDS-B), and smaller domestically focused U.S. drillers.

In fact, while the sanction game is taking center stage right now and is very exciting in its own right, the long game may be the more interesting one to consider. For every action, there's a reaction, and while Europe is doing its best not to react too quickly in the form of additional Russian sanctions, it may very well change the international energy picture by getting the United States to open its energy resources to the world.

That, in the end, would do more to harm Russia than anything else, since Europe would than be able to stop buying the country's energy without the fear of a swift and potentially major economic impact. If you are keeping an eye on this often volatile chess game, don't get too caught up with the early moves. You might be better off investing in companies that would benefit from Europe changing energy suppliers.