The Bottom Line
Capstone believes the Senate’s vote on July 28th to advance the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 presages Senate passage, likely within the next week. Yet, concerns among House Democrats about the bill’s tariff provisions will delay its consideration in the House and likely lead to a watered-down version that gives President Trump numerous outs so he can avoid sanctioning China, India, and other importers of Russian energy.
- The Graham Sanctioning Russia and Iran Act of 2026, which passed its first procedural hurdle on July 28th, will likely become law by being attached to a must-pass measure in November or December. The bill would mandate sanctions against Russian President Vladimir Putin and other Russian officials and banks. It would also authorize 100% tariffs on the largest buyers of Russian crude oil and gas. Primary targets would be China, India, Slovakia, Hungary, and Azerbaijan.
- House Democrats, their agreement regarding the underlying purpose of the bill of thwarting Russian energy revenues notwithstanding, remain split about the measure. Many of them are concerned the Trump administration could abuse the new tariffs authorized by the bill.
- Should the bill pass, the key question is whether the administration would actually sanction China and also enforce sanctions at the exact moment the Iran war is creating a global energy crisis. The practical impact of the bill is limited as long as Trump maintains a general license currently permitting Russian energy transactions.
- If the bill is enacted, it would have little impact on the ability to import Russian nuclear fuel, a positive for Centrus Energy Corp (LEU). The watered-down text is a significant shift from harsher language seen in earlier versions of the bill over the last year.
Closing Loopholes and Degrading Russia’s Main Revenue Sources
After Russia launched its 2022 invasion of Ukraine, President Biden imposed the stiffest sanctions ever levied on the country in a coordinated effort with the US’s European allies. One goal was to remove Russia from the global banking system in what was billed as the “nuclear option” of sanctions. Even as the West engaged in punitive measures to undermine Russian commerce, the countries made an exception for energy products. Because Europe, China, and India all depended on Russian oil and gas, Biden opted to hold off on directly sanctioning the sector for fear of creating a supply shock that would lead to dramatic increases in oil and gas prices. Only toward the end of his term did Biden move on energy, targeting several major companies and key projects, but not Russia’s two largest oil producers.
Critics call the bill substantially weakened, arguing it mostly codifies existing sanctions Trump already has authority to impose under the International Emergency Economic Powers Act (IEEPA).
The new tariff authorities are the main obstacle to gaining Democratic support. Democrats in Congress are wary of giving Trump any additional tariffing powers, given fears that the administration would apply these duties in a manner that contravenes Congressional intent. For example, the tariff carveouts give the administration several pathways to selectively reduce tariffs on trading partners, limiting the impact of the bill and giving President Trump the ability to asymmetrical apply tariffs.
Proponents of the bill contend it will have real bite and that the tariff mechanism has sufficient guardrails to prevent its abuse. The tariff mechanism builds directly, albeit under a more legally durable framework, on the 25% tariff Trump imposed on India in 2025 and gives Congress a cudgel to push further action. It also forces the administration to systematically track Russian energy exports. Congress could gain new leverage, and the State and Treasury Departments could gain enhanced diplomatic tools against Russian oil importers, if the administration chooses to use them.
China is the central sticking point, since the bill would hit both its oil imports and its military support for Russia. Historically, sustained Chinese objection tends to make enforcement lag or quietly fade. Trump has two main outs: (1) an exemption for countries importing less than 15% of their gas from Russia and taking verifiable reduction steps, lifted straight from the Iran sanctions playbook, where Obama used the same tool to avoid sanctioning Chinese buyers of Iranian energy; and (2) the bill’s broader waiver authority.
The EU, Japan, Turkey, Brazil, and South Korea all lean on legacy Russian energy projects as they diversify their supply. If the bill passes, companies there will need to carefully document reduction efforts to stay under the exemption threshold, and could still find themselves exposed to tariffs used as pretext for unrelated grievances. Expect House Democrats to push to remove the tariff authority or add tighter guardrails.
Process for Passage
Senate Majority Leader John Thune (R-SD) will likely reach an agreement for a final vote on the bill before the August recess, sending the bill to the House for consideration. We expect the measure to languish there for the foreseeable future, given Democratic opposition, which would thwart quick consideration. Proponents could instead attach it to a must-pass vehicle like the National Defense Authorization Act (NDAA), but the GOP chairs would likely resist a bill touching their jurisdiction without their input, unless the White House wants it, in which case Republicans would fall in line. More likely, though, is that negotiators settle on a watered-down text, possibly dropping the tariffs and attach the new version to the NDAA.
Domestic Nuclear Fuel Impacts Limited, a Positive for Centrus
We expect the current sanctions bill to have a more muted impact on the domestic uranium market compared to earlier versions of the bill, a positive for Centrus Energy Corp (LEU). The bill would require continued implementation of the already-enacted 2024 import ban of Russian low-enriched uranium (LEU) and impose sanctions on senior officials associated with Rosatom State Atomic Energy Corporation and its subsidiaries. Centrus receives waivers from the Department of Energy under the 2024 import ban law to buy and resell Russian LEU to customers. That waiver ability ends starting in 2028. The sanction bill would not affect Centrus’ ability to receive waivers.
Other aspects of the bill, including various sanction authorities on vessels transporting Russian uranium, will likewise not significantly impact Centrus. This is because the bill includes a specific exemption under which no provisions would apply to Russian LEU that has been allowed via a waiver under the 2024 import ban bill.
If the Trump administration ultimately does impose sanctions on vessels carrying Russian uranium, the global LEU market would likely face supply issues given Russia’s LEU capacity accounts for about 43% of global capacity. The bill implies ‘uranium’ has the meaning of LEU, but it does not clearly define uranium. If the administration’s interpretation is that uranium encompasses the entire fuel cycle, there would also likely be uranium hexafluoride (UF6) supply issues due to Russia’s 28% share of global conversion production. The extent of supply issues will depend on whether the Trump administration exercises its sanction authority.
What’s Next
Trump is unlikely to push hard for passage, and the House will delay. This bill is not a Trump priority, and absent White House pressure, the bill will likely stall until passage of the NDAA, in which a watered-down version gets negotiated.
Read more from Capstone’s National Security and Defense Team:
Navy Investment to Expand the Maritime Industrial Base
Running on Empty: The Prolonged Energy Market Fallout from the Iran War
Why Iran Will Retain Control of the Strait While Negotiations Continue Indefinitely
