“The advantage of a straight price cap is you go to the Chinese or the Indians and you say, we’re going to force you to save money!” said Daniel Fried, a retired diplomat who has served as the State Department’s coordinator for sanctions policy.
The toughest sanction imposed by the United States and European Union on Russia so far has blocked the Russian central bank’s access to foreign currency reserves in global accounts. That led to a plummet in the value of the ruble. But the bank has amassed foreign currency from Russian companies that are paid in dollars and euros for commodities, including energy.
U.S. and European officials have focused discussions on oil sanctions, leaving out the thornier question of Russian natural gas exports. European nations rely on Russian gas to heat homes and power businesses, and it cannot be easily replaced.
There are signs that large Chinese state-owned oil companies are holding back on signing new oil contracts with Russia, given the uncertainty over sanctions. American officials say that while China has given diplomatic and rhetorical support to Mr. Putin, Chinese companies and the government have not sent economic or military aid to Russia.
Chinese companies might be waiting until Russian commodity prices fall further before signing new contracts. And they also want to avoid secondary sanctions, said Alexander Gabuev, a senior fellow at the Carnegie Endowment for International Peace. Chinese companies are not well versed in sanctions compliance, he added, so the executives tend to err on the side of caution.
The Biden administration is also discussing another way to inflict pain on Russia: legally seizing the Russian central bank assets that were frozen in accounts overseas during the war, as well as those of Russian tycoons, and giving them to Ukraine for reconstruction, U.S. officials say.
As with the proposed energy sanctions, the United States is exploring the idea with European nations and members of the Group of 7.
Edward Wong reported from Berlin, Paris and Washington, and Michael Crowley from Washington. Alan Rappeport contributed reporting from Königswinter, Germany, and Matina Stevis-Gridneff contributed from Brussels.