NEW YORK (TheStreet) -- I was talking to Joe Deaux today about the Ukraine crisis and the recent rebound in crude prices. It's true that the drama in Crimea and the possibility of further Russian action is having a constructive effect on prices, but that's only one small part of the crude story. There are other ways that events in Ukraine are impacting the energy space.

There is the threat of further economic sanctions being imposed by the United States. So far, only a few individuals inside the inner circle of the Kremlin are being subjected to sanctions, but there have been suggestions of extending those restrictions to a few companies that do business in Russia. And the first company that comes to mind with significant business in Russia is Exxon Mobil (XOM).

Sanctioning, or trying to limit Exxon's work in Russia would be a truly debilitating blow to both Exxon and the Russians. The largest energy company in Russia, Rosneft, has developed a partnership with Exxon on two of the largest potential future energy projects Russia has -- in the Arctic and with LNG on Sakhalin Island. If you are a shareholder in Exxon, you have to consider the unlikely possibilities both of further action by Putin in Eastern Ukraine and the likelihood of that being followed by company-specific sanctions imposed the United States.

I talk more about this with Joe in the video above.

At the time of publication the author had a position XOM.

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