Last month, the Trump administration imposed fresh sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, signaling a renewed desire to drive Moscow to the negotiating table in its war against Ukraine. But although these measures have the potential to harm the Russian economy, just how much damage they inflict will depend largely on one actor: Beijing. China bought almost half the oil Russia exported in 2024, evading Washington’s existing restrictions in the process. And new sanctions alone will do little to push China into significantly reducing its purchases.

The United States does have the power to change Beijing’s calculus. If U.S. officials threatened to deny major buyers of Russian oil—and their service providers, such as banks—access to the U.S. financial system, Beijing might conclude that whatever savings it derived from purchasing discounted Russian oil was not worth the costs. It might then cease buying from Moscow, depriving Russia of needed money for its war machine. Even if China did not totally put a stop to Russian imports, the United States could use sustained pressure to compel Beijing to reduce purchases or place conditions on Russia’s access to the revenues. Moscow might then finally be forced to negotiate in good faith over ending the war in Ukraine.

But unfortunately, there is little indication that Washington will take such action. Both U.S. President Donald Trump’s administration and the Biden administration before it subordinated pressing China on Russian oil to promoting other interests, including the ability to obtain Chinese rare-earth minerals. Trump is currently trying to preserve the current trade cease-fire with Beijing, something increased sanctions enforcement would likely upend. Yet Trump must test China’s boundaries, even if it means risking the trade cease-fire. If Washington does not stem the pipeline of energy-fueled cash from China to Russia, its overall commitment to sanctions and other kinds of restrictive policies will come into question. China will rightly see the United States as weak willed, unwilling to hold to its convictions or commitments. And the war in Ukraine will continue.

THE CHINA CARD

To make sanctions against Russia effective, the United States needs China to cooperate. But getting Beijing’s help will not be simple. Russia plays a critical role in its neighbor’s energy system, supplying China with nearly one out of every five barrels of oil it imports—more than any other country—including most of China’s pipeline oil imports. Chinese Foreign Minister Wang Yi underscored Russia’s significance at the Munich Security Conference in February. When asked if China would reduce its purchases of Russian energy to pressure Moscow to end the war in Ukraine, Wang responded with a question of his own: “If China does not import oil and gas from Russia, how could it meet its demands and ensure the need of more than 1.4 billion Chinese people?”

Chinese oil buyers have not completely ignored U.S. sanctions, because they do not want to jeopardize their access to the U.S. dollar financial system. In response to the latest round of restrictions, they are pausing their purchases to assess the risks and, perhaps, await guidance from Beijing. They may also be waiting for Russia to reconfigure its oil trading networks in order to skirt the new sanctions. Additionally, many small, nonstate refineries—sometimes called “teapots”—have already used up their crude import quotas, which are set by the Chinese government, for 2025 and probably won’t be able to purchase more Russian oil until 2026, when they will have new quotas. Consequently, according to the trade analytics firm Kpler, China’s imports of Russian crude this month are projected to fall by as much as 800,000 barrels per day—a drop of 40 percent from a monthly average of two million barrels per day for the first ten months of this year.

But if past practice is any guide, at least some of the buyers will probably return to purchasing Russian oil. This will most likely be the case for the teapot refineries. These refineries operate on slim margins and can obtain discounts on sanctioned barrels, so they depend on sanctioned crude oil from Russia for their survival. If the new sanctions mean that they can secure even steeper discounts on Russian oil, they almost certainly will step up their purchases. The same is true for larger oil companies and refineries that are facing restrictions. Yulong Petrochemical, a world-scale petrochemical complex sanctioned by the United Kingdom and the European Union for importing Russian oil, is increasing its purchases from Russia after other suppliers canceled their deliveries. And PetroChina’s Liaoyang Petrochemical, a company sanctioned by the European Union for buying Russian oil, will also likely keep doing so, as the Russian oil it purchases is delivered by pipeline, which is more challenging for foreign governments to monitor than oil that arrives via ship. These two refineries have a combined capacity of 600,000 barrels per day. China’s national oil companies have suspended their purchases of seaborne Russian oil, which is estimated to be between 250,000 and half a million barrels per day. But PetroChina, the state-owned giant, continues to receive at least 800,000 barrels per day from Rosneft via pipeline. A portion of that oil was paid for over a decade ago, but not all of it was delivered to China before Russia launched its full-scale invasion. Some of it, then, might have been purchased in violation of sanctions.

To make sanctions against Russia effective, the United States needs China to cooperate.

Yet there are reasons Washington has not sanctioned or otherwise taken action against these companies. During the Biden administration, U.S. officials were concerned that clamping down on Russian (and Iranian) oil exports would drive up oil prices; that concern has been mitigated by the current oil supply glut. Now, Trump has to weigh the importance of disrupting the flow of Russian oil exports to China against the harm such a disruption would do to other issues in the U.S.-Chinese relationship that are important to him, such as maintaining the free flow of rare earths, continuing the broader trade cease-fire, and visiting Beijing next year. And, in general, Trump appears to prefer preserving his “fantastic relationship” with Chinese President Xi Jinping to cracking down on Russia’s exports.

Consider the record. The United States has not yet penalized any Chinese entities for importing liquified natural gas from Russia’s sanctioned Arctic LNG 2 project, even though at least 11 tankers full of such gas have been delivered to China since August. The United States has also refrained from penalizing economically and politically important Chinese entities, which would almost certainly provoke a strong response from Beijing. For example, both Trump administrations sanctioned subsidiaries of central state-owned companies but stopped short of punishing the parent companies themselves. In 2019, Trump sanctioned two subsidiaries of the COSCO Shipping Corporation, the world’s third-largest container transporter and fifth-largest port terminal operator, for handling Iranian crude but left the parent company untouched. In 2025, Trump penalized a terminal partly owned by a unit of Sinopec, China’s largest refiner, for accepting Iranian oil transported on a sanctioned tanker. But it did not target the refining behemoth itself.

Trump appears poised to remain lenient. The president, for example, said he did not really discuss China’s Russian oil imports with Xi when they met in South Korea on October 30, despite saying that he would on October 22.

KILL THE CHICKEN TO SCARE THE MONKEY

Even if the United States were to get serious about choking off the supply of Russian oil to China, Washington would struggle to target every entity. Traders of sanctioned fuels have honed their abilities to complicate the enforcement of U.S. oil restrictions. For example, Iran, which has been under U.S. oil-related sanctions for over a decade, uses a shadow fleet and ship-to-ship transfers off the coasts of Malaysia and other countries to deliver Iranian crude to China. Likewise, liquified natural gas from the Arctic LNG 2 project flows to a single port, which is operated by a state-owned enterprise, PipeChina, in the southwestern Chinese city of Beihai. Beijing may have calculated that by having all that liquified natural gas arrive at one port, it can reduce the number of Chinese entities at risk of being penalized by Washington; Chinese officials may also be betting that the United States will not target large, state-owned businesses such as PipeChina. The Wall Street Journal has found that China is also increasingly using barter-like systems to exchange oil for construction contracts, minimizing the movement of financial assets across borders and making it harder for Washington to detect which banks and companies are involved.

Chasing every individual actor that violates U.S. sanctions would be extremely hard and time-consuming. But the United States could probably stop such evasion by making an example of a handful of companies and banks. In China, there is a saying: kill the chicken to scare the monkey; that is, punish one party to deter others from engaging in the same behavior. Yet thus far, rather than targeting chickens, Washington has been swatting at mosquitoes—the teapot refineries and the individual ships and ship owners. This has proved insufficient to deter Beijing from importing sanctioned oil. To create a real sense of risk, Washington should prioritize sanctioning Chinese financial institutions that do business, however indirectly, with Rosneft and Lukoil. Trump could do this under existing sanctions authorities, which grant the U.S. president the ability to determine if institutions are providing material support for U.S.-sanctioned individuals or entities. If reducing the flow of Russian oil to China is a top priority for the president, he should exercise this power, identifying and threatening to penalize any entities in the Chinese financial system with ties to sanctioned actors.

This approach does carry risks. Were China to persist in its oil purchases, daring the United States to expand its sanctions campaign, the actual execution of the sanctions could upset the international financial system. If large Chinese banks became off-limits to the United States, then non-U.S. banks would probably follow suit, upsetting global financial markets. But fortunately, the United States does not face an all-or-nothing choice; merely signaling a readiness to impose sanctions on a small or medium-sized Chinese bank could be sufficient to convince Beijing to work with the United States on some kind of solution, such as restricting the flow of Russian oil revenues back to Moscow or limiting what Russia can buy with those revenues. Likewise, the United States could agree to permit some existing contracts to be completed, such as those involving oil pipeline exports into China, which are more difficult to monitor than ship-based exports. And the Trump administration could send signals in various ways: determining that a Chinese bank CEO is in violation of U.S. sanctions, working with Congress to adopt legislation that would block offending Chinese banks from having financial relationships with U.S. banks, or even publishing information about the nature of the Chinese banking system and its connection to Russian energy exports.

The measures Trump adopted against Rosneft and Lukoil are a worthwhile expansion of Washington’s existing efforts. But for them to be effective, he will need to get serious about enforcement. Otherwise, China will continue to downplay the significance of U.S. threats—both when it comes to Russia and in general.

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