The New Sanctioning Russia Act: Optics for Now, Leverage for Later

On September 18, Congress passed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which targets Russia’s energy revenues and threatens tariffs against the world’s largest purchasers of Russian oil and gas. But while the legislation may have been designed to constrain Russia, it looks less like a sanctions measure and more like an instrument of economic statecraft against major buyers such as India and China.

In the short term, the new law serves as an important political purpose: Congress gets to demonstrate resolve against Russia, signal support for Ukraine, and show that it is willing to raise the economic costs of the war for the Kremlin. The House approved the legislation in its final legislative window before lawmakers left Washington to focus on the midterms. At a minimum, the bill allows members of Congress to return home and argue that they acted.

However, the most consequential part of the legislation may not be political optics, but rather legal architecture. Section 113 authorizes tariffs of up to 100 percent on major purchasers of Russian oil and gas and on countries facilitating sanctions evasion, while section 115 gives the president broad waiver authority if doing so is deemed in the national interest. Together, these provisions create something very different from a standard sanctions regime: The ability to impose, delay, suspend, or altogether waive tariffs creates leverage. The value of the law may therefore lie less in the tariffs themselves than in the uncertainty surrounding when, how, and against whom they might be used.

India sits at the center of this issue. On paper, China is the largest buyer of Russian energy and India is the second largest. Yet the likelihood of sanctions and tariffs being imposed on the two countries may not be equal. The United States already faces deep strategic and economic competition with China. India presents a more complicated case: It is simultaneously a strategic partner, an important actor in the Indo-Pacific, and a country that continues to buy significant quantities of Russian crude. If the United States seeks an early demonstration of the law’s effectiveness, India may be the more plausible target precisely because the relationship remains negotiable. Tariffs can be threatened, calibrated, or waived in ways that create bargaining room, but China offers far less flexibility.

Yet enormous questions remain unanswered, including whether the White House actually impose 100 percent tariffs on a major strategic partner, whether the threat alone would be sufficient to reduce Russian oil purchases, and how India might respond (e.g., whether it would accelerate diversification away from Russian crude, seek alternative arrangements, or retaliate by reducing its purchase of gas from the United States). According to Vortexa data, the United States supplied more than half of India’s natural gas imports between June and September 2026. A sanctions dispute that spills into energy trade could therefore have broader consequences for both global energy markets overall and the U.S.-India relationship that both sides have spent years broadening beyond defense and security cooperation.

The global oil market is already under pressure. The legislation assumes that reducing demand for Russian energy will further constrain Moscow, but it is unclear whether policymakers have fully accounted for the potential impact on energy markets, particularly if disruptions in the Middle East persist. Russian crude has become deeply integrated into India’s energy system. Vortexa data indicates that more than half of India’s crude imports came from Russia during June and July 2026. Imports of Russian crude to India declined to roughly 40 percent in August, and provisional September figures suggest a further reduction to around 31 percent. But replacing 1–2 million barrels per day is not simply a matter of finding another supplier, especially as supply from the Middle East remains constrained. The consequences of India fully moving away from Russian crude for prices, spare capacity, shipping routes, refinery economics, and global market stability remain uncertain.

For now, the legislation achieves its immediate political objectives of signaling toughness toward Russia and demonstrating congressional action ahead of the midterms. But its long-term importance may be something entirely different: It may mark the formalization of a new model of U.S. economic statecraft, one in which tariffs are increasingly used alongside sanctions as instruments of geopolitical leverage. India, China, and other buyers of Russian crude may soon discover whether Section 113 is primarily a threat, whether Section 115 becomes the preferred escape hatch, or whether both are designed to work together as a bargaining tool.

Shashwat Kumar is a fellow in the Chair on India and Emerging Asia Economics at the Center for Strategic and International Studies in Washington, D.C.