The legislation would give Washington new powers to target Russia’s energy revenues by threatening its largest oil and gas customers with tariffs of up to 100 per cent. Its effect will depend on how extensively President Donald Trump is prepared to use those powers against major trading partners, particularly China and India.
The US Senate has overwhelmingly approved legislation designed to reduce Russia’s energy revenues by exposing its largest oil and gas customers to punitive American tariffs.
The Senate passed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 by 86 votes to 11 on Friday, 7 August, giving the measure substantial bipartisan backing. It now moves to the House of Representatives, which is expected to consider it after returning from its summer recess.
The legislation bears the name of Republican Senator Lindsey Graham, who died in July after spending more than a year developing the sanctions initiative with Democratic Senator Richard Blumenthal. Before Graham’s death, senators had reached an agreement with the Trump administration on revised legislation, clearing an important political obstacle to its passage.
The final measure differs substantially from earlier versions of the proposal.
Under the revised framework, the administration can impose tariffs of as much as 100 per cent on goods from countries that rank among the five largest purchasers of Russian crude oil or natural gas. It can also target major countries facilitating the circumvention of Russian energy sanctions. An official Senate description of the revised legislationconfirms that the provision was deliberately narrowed to the largest Russian energy customers and major sanctions-evasion jurisdictions.
Earlier versions had raised the possibility of tariffs reaching 500 per cent against countries buying Russian energy. Those provisions generated concern in Congress because of the potential consequences for trade with countries including China and India. The revised bill reduced the secondary tariff ceiling to 100 per cent following negotiations with the White House.
The legislation nevertheless retains the possibility of tariffs of up to 500 per cent on goods imported directly from Russia.
China presents the central test
The distinction matters because direct US trade with Russia is already limited. According to US Census Bureau trade figures, the United States imported about $3.78 billion of Russian goods during 2025, compared with the scale of Russia’s trade with its principal Asian energy customers.
The greater potential impact therefore lies in secondary pressure on countries purchasing Russian oil and gas.
China is by far the most important case. The Centre for Research on Energy and Clean Air’s latest analysis of Russian fossil-fuel exports found that China remained Russia’s largest fossil-fuel customer in June, accounting for €7.3 billion, or 41 per cent of revenues generated by the five largest importers.
Since December 2022, China has bought approximately half of Russia’s crude-oil exports, while India has accounted for another 36 per cent.
Applying a 100 per cent tariff to Chinese goods would consequently turn a Russia sanctions measure into a major US-China trade decision.
That consideration gives Trump considerable reason to retain flexibility over implementation. China remains both one of America’s largest trading partners and an important supplier of industrial inputs. Washington would therefore have to balance the objective of reducing Russian energy revenues against the economic consequences of another large increase in tariffs on Chinese imports.
There is, however, an important legal difference between these tariffs and those Trump imposed earlier in his second term.
In February, the US Supreme Court ruled that the International Emergency Economic Powers Act did not give the president authority to impose tariffs, finding that Congress had not delegated such a power through that statute. Tariffs specifically authorised by new legislation passed by Congress would stand on a different statutory basis.
India shows why the threat itself matters
India is the second major test.
Contrary to suggestions that Indian purchases of Russian crude have already fallen substantially, the latest comprehensive figures point in the opposite direction. CREA found that India’s purchases of Russian crude reached a record level in June 2026, rising 34 per cent from May to €4.5 billion.
Current market indications also suggest that Asian demand for Russian crude remains firm. Russia is preparing to increase exports through its western ports in August, with demand from both India and China supporting Russian shipments as Asian buyers respond to disruption in Middle Eastern supplies.
The new legislation could nevertheless alter calculations before Washington actually imposes the maximum tariffs.
Refiners, banks, shipping companies and governments with substantial exposure to the US market will have to consider whether continuing or expanding purchases of Russian energy could eventually jeopardise their access to American customers.
The importance of the bill may therefore lie partly in deterrence. Companies do not necessarily need to face a 100 per cent tariff before changing purchasing decisions; the possibility that Washington could apply one may influence contracts, financing and future supply arrangements.
That does not mean the legislation will automatically deprive Russia of its principal energy markets. Moscow has spent several years redirecting oil and other commodities towards Asia and other non-Western economies, while China in particular has strategic reasons for maintaining its energy relationship with Russia.
The Senate vote nevertheless gives Washington a potentially stronger instrument for targeting the external demand that sustains Russian oil revenues.
Its practical importance will be determined not by the maximum tariff figures written into the legislation, but by whether Trump is prepared to use them against large economies whose trade with the United States is considerably more important than America’s remaining commercial relationship with Russia. China will be the clearest test of that willingness.
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