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

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.