Diamond prices are on the rise as sanctions on one of the world's two mining giants spread throughout the supply chain. In the past, the industry could turn to giant De Beers to get extra gems when supply was tight, but not this time.

According to Bloomberg, citing sources, the price of a small rough diamond has jumped by about 20% since the beginning of March. Reason: Diamond cutters and traders are scrambling to source stones after the US imposed sanctions on De Beers' Russian rival Alrosa, which accounts for about a third of global production.

For much of the modern history of diamonds, there has been a situation where De Beers could have tapped into its vast reserves, or simply tapped into hidden mining power. A little over 20 years ago, its vaults in London held stocks of diamonds worth perhaps up to $5 billion.

Those days are long gone. The company has only working reserves, and its mines are operating at full capacity. The likelihood of a significant increase in supplies until 2024, when the expansion of the flagship mine in South Africa is completed, is unlikely.

De Beers also produces relatively few diamonds of the type Alrosa specializes in: small, cheap gems that surround a larger stone in the center or are used in low-end jewelry such as Walmart or Costco.

For many in the sector, this means a growing shortage unless ALROSA and its trading buyers can find a workaround.

ALROSA has canceled its last sale in April and is unlikely to sell large volumes again this month, sources said. It's unclear when the company will be able to sell normally again, they said, even as the company, banks and buyers look for solutions.

The press service of ALROSA declined to comment. The US Treasury Department's license, which allowed it to wind up deals with the company, expired on May 7.

Although the famous American jewelers Tiffany & Co. and Signet Jewelers Ltd. announced they would stop buying new diamonds mined in Russia, retailers in countries such as China, India and the Middle East have not followed suit.

This dynamic raises concerns that diamonds from Russia will be passed off as diamonds from other origins.