To Hit Russia Hard and Support Ukraine, Capture the Oil Discount

Clayton Seigle

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Last week, President Trump announced renewed and expanded transfers of weapons to Ukraine in support of its defense against Russia. As Putin has grown more aggressive, despite the United States pushing for a ceasefire, the president has hinted at the need to dial up the pressure on Russia. 

In his press conference on July 14, 2025, he warned that Russia had 50 days (ending September 2) to negotiate a ceasefire, before the United States would impose 100 percent “secondary tariffs” on Russia, which can be presumed to apply to importers of Russian energy exports.

Limiting Russian energy revenues has been a primary objective for Western policymakers since the start of the Ukraine war. The oil price cap mechanism was devised to reduce revenues while maintaining market access for Russian barrels and avoiding a global price spike. 

However, the policy has not appreciably reduced Moscow’s oil revenues, mainly due to lax enforcement and the rise of the “shadow fleet” of tankers. As such, Russian oil prices have remained higher than the architects of sanctions intended, leaving ample revenues in the Kremlin’s war chest.

Now, the president and other U.S. policymakers are looking for options to put far greater pressure on Russian oil revenues. There is strong bipartisan support for Senator Lindsey Graham’s (R-SC) proposed Sanctioning Russia Act (SRA), 

which seeks to end the sale of Russian oil, gas, uranium, and other key commodities by threatening buyers with 500 percent “secondary tariffs.” Such high tariffs would effectively halt trade between countries that import Russian energy and the United States. 

The triggering mechanism is a presidential determination that Moscow has violated Washington’s demands, including any military action against Ukraine—the very next shot fired following enactment would qualify. Failure to negotiate an end to the war would also trigger sanctions. Only a lasting ceasefire and good-faith war-ending negotiations would save Russia and its counterparties from the new sanctions.