As the Senate reconvenes in Washington for its final week before a mid-September recess, it confronts a heavy agenda. However, for numerous senators, the primary focus is not on passing domestic legislation beneficial to Americans but on quickly approving the Lindsey O. Graham Sanctioning Russia Act of 2026, commonly called the “Russia sanctions bill.”
This bill, championed by the late Sen. Lindsey Graham, aims to intensify economic pressure on Russian President Vladimir Putin. Supporters believe that by cutting off financial resources for Russia’s military campaign, Moscow will be compelled to offer more concessions in peace talks over the four-year conflict in Ukraine.
Yet, both the reasoning behind this approach and the bill itself are flawed. The legislation will likely have minimal impact on Russia’s situation; since the war’s outset, further economic sanctions have not decisively influenced Putin’s decisions. On the contrary, this bill may entrench Russia’s stance rather than moderate it.
The bill features three principal components. First, it formalizes and broadens sanctions targeting Kremlin officials, Russian oligarchs, and various Russian financial institutions and companies. Second, it targets Russia’s shadow fleet, imposing stricter penalties on tankers and entities accused of smuggling oil or circumventing the Western price caps on Russian energy exports.
The third and most notable measure grants the president authority to levy tariffs up to 100% on the top five importers of Russian oil and natural gas, although allies reducing their imports gradually are exempted. The bill also permits the president to waive these penalties if national security interests require it.
Undoubtedly, if enacted and enforced, the bill would cause significant economic harm to Russia. It would disconnect Russian banks and energy firms, including Gazprombank—which handles energy transactions—from the SWIFT financial messaging system. Secondary sanctions and the loss of SWIFT access would also threaten third-party intermediaries working with sanctioned organizations. Coupled with measures targeting the shadow fleet, these provisions would make Russian oil exports harder to manage.
Still, after over four years under sanctions, Russia’s financial institutions and companies have developed workarounds. They can rely on small regional banks with minimal U.S. market exposure. Additionally, they use complex shell companies operating through friendly nations, conduct transactions via “stablecoin” digital currencies, and resort to direct bartering with countries, exchanging Russian raw materials for machinery, microelectronics, or other products. While not ideal, these tactics allow Russia to endure even the harsher sanctions proposed here.
The tariff components are expected to have even less influence on Russia’s revenues. The legislation targets the top five customers of Russian energy, which includes U.S. allies such as France, Japan, Spain, Turkey, and Belgium. However, Congress, wary of granting Trump too much power to impose punitive tariffs on allies, exempted countries accounting for less than 15% of Russian exports that are actively reducing their dependence on Russia. This exemption effectively shields nearly all potential tariff targets except for three nations: China, India, and Hungary.
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