Sanctions

US Senate Passes Sweeping Russia Sanctions Bill, Threatening 100% Tariffs on Oil Buyers

Published

2 hours ago

August 14, 2026

The U.S. Senate passed a sweeping new sanctions bill on Friday, August 7, targeting Moscow’s energy revenues in what could become the most consequential piece of Russia-related legislation since the war in Ukraine began. The bill, dubbed the “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026,” authorizes tariffs of up to 100% on countries that continue importing Russian oil and gas (Al Jazeera).

A Bill Years in the Making

The legislation had been stalled for months, previously blocked by the Trump administration before securing White House approval in the days before its passage. Senator Lindsey Graham, working with a bipartisan group of colleagues, called the measure one that “will make a decisive impact that goes beyond what can be achieved on the battlefield,” according to Al Jazeera’s reporting on the Senate vote.

The bill’s scope extends well past Russia’s direct trading partners. Reporting from the Hindustan Times flagged that India risks new US tariffs over its continued purchases of discounted Russian crude, illustrating how the legislation is designed to pressure third-country buyers, not just Moscow directly (NewsNow aggregation).

Why Now: Russia’s Oil Windfall From the Iran War

The timing is notable. According to a mid-year assessment from the Kyiv School of Economics Institute, the Iran war has inadvertently boosted Russian oil export earnings, which climbed from an average of $10.4 billion per month in January–February to $21.5 billion in April and $20.8 billion in May as global energy prices spiked (KSE Institute).

That windfall has complicated Western sanctions strategy. The KSE Institute’s analysis notes that disruptions to global energy flows caused by the Iran war have prevented more transformative measures against Russian energy exports, even as the EU has continued layering on incremental sanctions packages — its 21st so far — targeting the shadow fleet and anti-circumvention structures.

The Domestic Squeeze Continues Regardless

Even with the oil windfall, Russia’s underlying fiscal position remains under strain. The Moscow Times reports that Russian authorities are hiking the value-added tax rate from 20% to 22% starting January 1, 2027, while lowering the mandatory VAT registration threshold from 60 million to 10 million rubles — a move that will sweep far more small businesses into the tax net (The Moscow Times).

Forbes contributor analysis from mid-July estimated Russia’s 2026 growth at just 0.4%, down from an already weak 1% in 2025, even as the economy remains dependent on fossil fuel revenues that bring in roughly €734 million a day (Forbes). The World Bank, meanwhile, projects a global oil supply surplus will push Brent crude down to around $60 a barrel on average in 2026 — the lowest in five years — which would sharply cut into the same export revenues the Iran war has temporarily inflated.

What the New Sanctions Regime Adds

Beyond the Senate bill, the UK’s Office of Trade Sanctions Implementation published fresh guidance on August 3 covering banknote trade restrictions with Russia and Belarus, part of a broader tightening across Western jurisdictions (Fieldfisher). China has also been drawn into the sanctions crossfire: on July 24, Beijing added 14 EU-based companies to its own export control list in retaliation for the EU’s designation of 14 Chinese and Hong Kong entities under its Russia sanctions package — a sign the sanctions fight is becoming a genuinely multipolar affair rather than a purely US-Russia dispute.

The Bottom Line

The Graham bill’s real test will come in implementation. Secondary tariffs on buyers like India and China carry significant diplomatic and economic risk for Washington itself, given how deeply intertwined those countries are with US trade and investment flows. Whether the administration follows through on the threatened 100% tariffs — or uses the legislation primarily as negotiating leverage — will shape both the endgame of the Ukraine war and the next chapter of global energy markets.

For Russia, the near-term picture is one of contradiction: elevated oil revenues from a war it isn’t party to, layered atop a domestic economy showing every sign of a prolonged, tax-funded slowdown.

What does the new US Russia sanctions bill do?

The Senate-passed “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026” authorizes tariffs of up to 100% on countries, including India, that continue importing Russian oil, gas, and uranium, aiming to cut off Moscow’s energy revenues.

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Analysis

The Yuan Now Settles 67% of Russian Oil Payments — Quiet De-Dollarization in Action

Published

1 month ago

July 12, 2026

Abdul Rahman

One of the least-covered consequences of the Western sanctions campaign against Russia is a quiet but historically significant shift in which currency actually settles global oil trade. According to J.P. Morgan data cited in sanctions-tracking research, only about 5% of Russia’s oil exports are now settled in dollars — down sharply from 55% before the 2022 invasion of Ukraine. The ruble now accounts for 24% of payments. The Chinese yuan dominates the rest, settling roughly 67% of Russian oil transactions — putting the large majority of Russian barrels entirely outside the US dollar financial system.

This is arguably the most consequential and least-reported financial story to come out of the Russia sanctions regime: Washington’s own sanctions architecture has become one of the yuan’s biggest internationalization boosts in its history, achieved not through Chinese policy design but as an unintended side effect of US and EU enforcement.

How the Shift Happened

The mechanism is straightforward. As the US and EU escalated sanctions on Russia’s oil majors — designating Rosneft and Lukoil, which together account for roughly 80% of Russia’s oil exports — dollar-clearing banks became unwilling to process transactions tied to sanctioned entities, regardless of the underlying legality of a specific trade. Russian exporters and their remaining major customers, chiefly China and India, needed an alternative settlement currency that wasn’t subject to US correspondent-banking veto power. The yuan filled that gap because China’s own banking system, while not immune to secondary sanctions risk, offered a viable channel that Chinese state banks were willing to maintain for a strategically important energy supplier.

Layered on top of currency settlement is a physical logistics workaround: a “shadow fleet” of tankers now numbering in the hundreds, which Ukraine’s allies have been sanctioning vessel-by-vessel — reaching 640 designated ships across the US, UK, and EU — to try to deter buyers from taking on the compliance risk of purchasing oil from a sanctioned carrier.

Why This Matters Beyond Russia

The precedent this sets is the real story. Any country facing a dollar-based sanctions regime in the future — for any reason, in any conflict — now has a working, real-world template for restructuring its trade settlement around the yuan instead of the dollar. That is precisely the kind of “weaponisation of the dollar” outcome that US Treasury officials have historically warned against, because it erodes the dollar’s structural advantage: the assumption that there is no viable alternative reserve and settlement currency at scale.

For emerging economies, including Pakistan, watching how sanctions regimes actually function in practice — not in theory — is now directly relevant to reserve and trade-settlement planning. A financial system increasingly split into a dollar-clearing bloc and a yuan-clearing bloc changes the calculus for how countries diversify their own reserves and structure energy-import payment arrangements, an issue already relevant given Pakistan’s own reserve-diversification pressures.

The Limits of the Yuan’s Rise

This shift should not be overstated as evidence of imminent dollar decline. The yuan’s gains here are almost entirely confined to Russia-specific trade, driven by sanctions necessity rather than organic global demand for yuan-denominated reserves or contracts. China’s own capital controls, the yuan’s limited convertibility, and the absence of deep, liquid yuan-denominated bond markets outside China continue to cap its broader reserve-currency ambitions. What sanctions have done is prove the yuan can function as an alternative settlement currency at meaningful scale under stress conditions — a proof of concept rather than a completed transition.

What Comes Next

The two numbers worth tracking going forward are the dollar-settlement share of Russian oil trade — to see whether it stabilises near 5% or falls further — and whether China begins extending similar yuan-settlement arrangements to other sanctioned or sanctions-adjacent energy exporters, such as Iran, which would confirm this is becoming a durable financial architecture rather than a one-off wartime adaptation.