Two interesting points raised in this article (extracted below) on OilPrice.com.
1. A significant aspect of the proposed Bone-Crushing Sanctions Bill (The Sanctioning Russia Act of 2025, SB 1241), is that they would institutionalize sanctions/secondary sanctions in an enduring way than Executive Order - more reliably supporting significant business investment in transitioning off of Russian energy longer term.
2. Relying on the price cap to marginally reduce Russian revenue, disproportionally benefits China (India and Turkey) with a cheap energy competitive advantage in global commerce. Secondary sanctions on buyers of Russian energy is both more effective in reducing Russian revenue, and removes any advantage for China.
OilPrice.com reports:
Why hasn’t Trump Hit Russia With More Sanctions?
- President Trump has cited concerns about affecting potential peace negotiations.
- The Sanctioning Russia Act of 2025, proposes primary sanctions on Russian banks and secondary sanctions on entities supporting the war in Ukraine.
- Concerns exist about the impact of financial sanctions on the dollar’s role in global trade and the effectiveness of existing measures like the oil price cap.
“Trump has threatened to use “devastating” measures against Russia if he feels the time is right. But he has repeatedly said that time has not yet come, voicing concern that imposing new sanctions could undermine his push for peace by hardening President Vladimir Putin’s stance.
“Only the fact that if I think I’m close to getting a deal,” he told reporters at the White House on May 28 when asked what was stopping him from hitting Moscow with new sanctions. “I don’t want to screw it up by doing that. You have to know when to use that.”
When and if that time comes, what could new US measures look like?...
...Another round of sweeping sanctions would come at an inopportune time for Moscow, with Russia’s economy slowing sharply amid falling oil prices and prohibitively high interest rates. It could be headed for a “hard landing,” a term used to describe a bad recession, London-based consultancy Capital Economics warned earlier this month...
...For the moment, at least, the chief focus of decisions about potential new US punishments is a bipartisan bill spearheaded by Senators Lindsey Graham (Republican-South Carolina) and Richard Blumenthal (Democrat-Connecticut).
The Sanctioning Russia Act of 2025 (Bone-Crushing Sanctions) would hit Russian banks and other entities supporting Moscow’s war on Ukraine with primary sanctions, while using secondary sanctions to slap penalties on countries, companies, and individuals worldwide that do business with the targeted entities.
In addition, it would impose tariffs of at least 500 percent on imports from any country that “knowingly sells, supplies, transfers, or purchases oil, uranium, natural gas, petroleum products, or petrochemical products that originated in the Russian Federation,” according to the text.
China, India, and Turkey are among the biggest buyers of Russian energy exports.
The senators have said the bill aims to “hold China accountable for propping up Putin’s war machine by buying cheap Russian oil from the shadow fleet” — hundreds of often aging vessels of opaque ownership that Moscow uses to evade Western sanctions on its most lucrative product. Oil exports account for about a third of Russia’s federal budget revenue.
Primary and secondary sanctions on Russian banks would be a major step to hamper the country’s economy, Rachel Ziemba, a sanctions expert at the Center for a New American Security, a Washington-based think tank said...
...Chinese financial institutions are among the foreign firms still working with Russian banks...
...It (the Bone Crushing Sanctions Bill) may also be aimed at enshrining sanctions into law. Some of the sanctions it would impose had already been put into force by Trump’s predecessor, Joe Biden.
“The incremental effect [of the bill] might not be that great in the near term, and would perhaps be more impactful as a means of making it more difficult for the Trump administration or any administration to lift sanctions in the future,” Ziemba said...
...To punish Russia for scuttling peace talks, the G7 has proposed lowering the oil price cap from $60 a barrel to $50. The Financial Times reported this week that the Trump administration blocked the proposal. That decision may reflect Trump’s preference to hold off on new Russia sanctions for the time being, but it is also possible that the US president doesn’t like the price cap because it benefits US competitors like China and India, Ziemba said. (they get cheaper oil from Russia, than the rest of the world is paying)
She also said there is little point in the G7 lowering the price cap if its members do not widen sanctions against the shadow fleet.
Ramping up sanctions on Russia’s oil industry, including the shadow fleet, could deliver “a very tangible blow to Putin” if he drags his feet on peace negotiations, Leon Aron, a senior fellow at the Washington-based American Enterprise Institute, told RFE/RL in an interview earlier this month. “This may move him toward at least contemplating peace seriously.”
Newt Gingrich, a Republican who was speaker of the House of Representatives in 1995-99, said the Trump administration should not just focus on economic sanctions. He called for the United States to “dramatically” increase the quality and quantity of military aid to Ukraine.
“Putin will only stop if he has no choice. Any other strategy is wishful thinking which will extend the war and cost more innocent lives,” Gingrich said in a post on X.
What steps Trump takes to press Putin, if any, may become clearer in June.
“We’re going to find out whether or not he’s tapping us along or not, and if he is, we’ll respond a little bit differently,” Trump told reporters at the White House on May 28. “But it will take about a week and a half, two weeks.”
KSA has announced increased oil production, perhaps not only due to upcoming activities regarding Iran.
Used properly, this bill could allow Trump to play the "good cop", rather than directly threatening Putin, which he seems unwilling to do. The bill can only advance with back channel support from Trump (and obviously his signature), Trump can certainly offer to kill it in return for Russia making a deal with Ukraine.
“...it is also possible that the US president doesn’t like the price cap because it benefits US competitors like China and India, Ziemba [think tank sanctions expert] said. (they get cheaper oil from Russia, than the rest of the world is paying)
She also said there is little point in the G7 lowering the price cap if its members do not widen sanctions against the shadow fleet.”
I just returned from a trip on the DelMarVa Peninsula, traveling through Virginia and Maryland, as I had done also a month ago. Previous month the Regular gas price at typically low cost Royal Farms was $3.09/9. This trip it was $2.99/9. Last month price at the bargain place I normally use was around $2.96/9. this month was $2.86/9. I question whether US gas prices will lower much more, as I have already seen info that producers in the more expensive US oil/gas production areas have been shutting down, or not doing more exploration in those expensive areas. Many are not aware that the very low prices under 45 caused many producers in high cost areas like N. Dakota to stop pumping and completely shut down. In fact there was so much oil pumped then that for a very brief time, there were NO MORE places to store it, and companies were even paying people to accept their surplus oil proction. Trump as 47 will have to deal
with big oil companies if he tries to force US oil to unprofitable sale prices. Drill, drill, drill has a nice ring, but must face economic realities.
We are fortunate that we do not face Russian bank charges of 21% and higher for bank loans. However my HELOC (home equity loan) has held steady at 8.6% for several months, so I have held off making some major home repairs. And this rate is with a score over 700 on my part. Our banks and the Fed will no doubt continue to be cautious as our economy continues to be affected by repidly changing rules on areas like tariffs.
Organizations like the G7 and countries in Europe will no doubt be concerned by recent efforts of a small Baltic states (Estonia or Latvia?) to control a probably Russian oil transporting ship to control that ship. There was an immediate Russian response by their hostile air craft. The motive for stopping the ship included suspicion they had accidentally or deliberately damaged undersea communication cables by dragging their anchor. Continued Russian defense of their oil distribution is now being met by strong efforts of the small Baltic states (Latvia, Lithuania, Estonia) and Poland to fortify their borders with Russia, and Russia controlled Belarus and land and seaport Kaliningrad. Serious defensive installations like “dragon’s teeth” and others along perhaps a thousand miles of borders by the 4 Baltic countries are in process of installation, planned, or contemplated. No one who has ever been under Russian control wants to repeat that nightmare, as Ukraine defense has so amply demonstrated. Meanwhile, President Trump will continue his strategy of continuing to drive Putin crazy.
Note, my recent long comment was in response to your long comment #16,462.