The US President, Donald Trump signed a law that will impose sanctions on any firm that helps Russia’s state-owned gas company, Gazprom, finish a pipeline into the European Union.
The sanctions target firms building Nord Stream 2, an undersea pipeline that will allow Russia to increase gas exports to Germany.
The US considers the project a security risk to Europe.
Both Russia and the EU have strongly condemned the US sanctions.
Congress voted through the measures as part of a defence bill last week and the legislation, which described the pipeline as a “tool of coercion”, was signed off by Mr Trump on Friday.
The almost $11 billion Nord Stream 2 project has infuriated the US, with both Republican and Democratic lawmakers opposing it.
The Trump administration fears the pipeline will tighten Russia’s grip over Europe’s energy supply and reduce its own share of the lucrative European market for American liquefied natural gas.
President Trump has said the 1,225km (760-mile) pipeline, owned by Russia’s Gazprom, could turn Germany into a “hostage of Russia”.
The US sanctions have angered Russia and the European Union, which says it should be able to decide its own energy policies.
Earlier this week German Chancellor Angela Merkel said she was “opposed to extraterritorial sanctions” against the Nord Stream 2 project.