President Vladimir Putin and two Crimean leaders have signed a treaty that makes Ukraine's Crimea region part of Russia.
The signing follows a speech by the president to the Russian parliament.
An unusually frank Nato Secretary General issued an unequivocal warning on the course of events should Russia attack Latvia or Estonia.
The West responds with sanctions and closer political ties with Ukraine as Russia's President seals the annexing of Crimea to much fanfare.
Supporters of the controversial fracking industry believe shale gas could be America's most potent weapon in the stand-off with Russia.