Watch: Why Russia is threatening Lithuania over Kaliningrad

Russia has warned it could "take action" against Lithuania after Vilnius started applying sanctions on Russian goods transiting through its territory and entering Kaliningrad.

The exclave, sandwiched between Lithuania and Poland, is of strategic importance for Russia, which acquired the territory after WWII.

It now houses the country's Baltic fleet as well as nuclear missiles, according to reports. It is also one of the country's most important industrial centres and has Russia's only ice-free port.

Moscow branded Lithuania's new actions as "unprecedented" and "unlawful".

Lithuania, meanwhile, has said that it is only following EU sanctions against Russia over its invasion of Ukraine. Imports and transit of certain goods such as coal, metals and construction materials through the EU is barred.

The EU has supported Lithuania, emphasising that the small Baltic state is respecting the bloc's sanctions and is in no way implementing measures unilaterally.

Josep Borrell, the EU's top diplomat stressed earlier this week that "the land transit between Kaliningrad and other parts of Russia has not been stopped nor banned, there is no blockade" and that "transit of passengers and goods that are not sanctioned continues."

"In accordance with European Union sanctions, there are import and export restrictions that apply in relation to certain goods including the prohibition of transit for though goods through the European Union territory. And Lithuania is doing nothing else but implementing the guidelines provided by the Commission," he told reporters.

Watch our report in the video player above.