The ban on Russian diamonds could lead to acute diamond supply chain disruptions, said Paul Zimnisky, an independent diamond industry analyst.
Although the first wave of sanctions didn't outright ban companies from buying diamonds from Russia, they complicated businesses' ability to pay for them since many of Russia's banks have been expelled from the international banking system SWIFT, said Zimnisky.
"(The sanctions) would draw out the delivery of rough diamonds by weeks, potentially months, to manufacturers who cut and polish the diamonds," he said. For example, India -- which accounts for 90% of all diamond cutting and polishing in the world -- would immediately feel the impact, CNN.com notes.
The delays of up to three to six months will then make their way to retailers who buy the polished diamonds, he said.
The ban now means US businesses can't buy Russian diamonds at all and will have to source Canadian, African, Brazilian or Australian diamonds, said Zimnisky.
Another hurdle he anticipates layered on top of the hard-hitting government sanctions are "self sanctions," stemming from the moral and ethical stance that consumers themselves may adopt. "For many retailers, up to a third of their existing diamond inventory is of Russian origin," he said.
The threat of disruptions to the diamond supply chain comes as the industry is already experiencing record global demand for diamonds and supply is at a decade-low level.
"Demand has been so robust over the past two years that there is essentially no excess inventory of diamonds right now," said Zimnisky.
Zimnisky anticipates that the weight of geopolitical tension will affect diamond prices. "The time to watch is midyear, when businesses start to stock up on diamonds in preparation of holiday demand. I think that's when the shortages will be felt most," he said.
Martin Rapaport, chair of the Rapaport Group, sees the situation somewhat differently.
"Shortages of wheat, oil and other essentials and their impact on inflation will have a greater effect on diamond prices than any shortages of diamonds," he said.
Alex Shishlo for Rough&Polished
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