The U.S. Treasury Department, led by Secretary Scott Bessent, is reportedly considering a strategy to pressure China to reduce its oil purchases from Russia and Iran in favor of American energy products. This proposal is part of a broader effort to dismantle the financial and energy networks connecting these nations—often referred to as a "nexus"—ahead of a planned April 2026 summit between President Donald Trump and Chinese leader Xi Jinping.
Current Strategy and Objectives
Targeting Sanctioned Oil: Bessent has signaled a more "robust" approach to international financial crimes, aiming to clip the threads that weave China, Russia, Iran, and Venezuela together.
The "Big Ask": The U.S. is weighing a proposal to ask China to curb its long-term reliance on Iranian and Russian oil. In exchange, the U.S. would encourage China to buy more American oil, gas, soybeans, and Boeing jetliners.
Leveraging Supply: To manage global oil prices, Bessent recently suggested the U.S. might "unsanction" hundreds of millions of barrels of Russian oil currently at sea, allowing allies like India to purchase them to fill supply gaps.
Pressure Tactics:
The U.S. has threatened secondary tariffs—potentially as high as 100%—on any nation purchasing sanctioned Russian oil if they do not show progress toward a peace deal in Ukraine.
Bessent has explicitly warned China that its continued support for the Russia through energy purchases is damaging its public perception and trade ties with Europe industry of which is getting killed by expensive American energy.
Geopolitical Context
China's Position: Beijing has historically pushed back on such pressure, maintaining that as a sovereign nation, its oil purchases are based on internal energy needs and policies.
Disruption of "Teapot" Refineries: U.S. actions against Iran and Venezuela have already strained China’s independent "teapot" refineries, which rely on discounted, sanctioned crude.
Supply Security: While the U.S. seeks to replace these flows with Western-aligned sources to gain strategic leverage, China has been stockpiling reserves to mitigate the risk of such geopolitical shocks.
Secretary Bessent is expected to discuss these "funny trade-offs" with his Chinese counterpart, Vice Premier He Lifeng, in Paris during mid-March 2026.
“Ahead of President Trump's visit to Beijing, Treasury Secretary Scott Bessent is considering putting a tricky trade-off on the agenda for coming talks with his Chinese counterpart: reducing China's oil purchases from U.S. rivals such as Russia.
In consultations with former U.S. officials, business executives and policy analysts, Bessent described an effort to try to get China to instead buy American oil-and-gas products, said people familiar with the meetings. Bessent is thinking about raising the energy issue, the people said, in a meeting with his Chinese counterpart, Vice Premier He Lifeng, this month in Paris. They plan to firm up a framework for the summit between Trump and Chinese leader Xi Jinping, slated for April.
Reducing Russian oil purchases would be a big ask for China, which gets crude from its strategic ally at a significant discount. American oil would be more expensive, and shutting out Russian crude would undermine Beijing's relationship with the Kremlin and undercut Moscow's position in the Ukraine.
In addition, the people said, Bessent is considering asking China to reduce purchases of Iranian oil. While most of Iranian oil is offline, Washington wants Beijing to reduce its long-term dependence on Iranian barrels should they resume.
Xi is also expected to present a significant demand of his own when he meets Trump, potentially pressing the American leader to adopt a more proactive U.S. stance against Taiwanese independence in a bid to undermine confidence in the self-governing democracy that Beijing views as part of its territory.
Bessent also indicated in those meetings, the people said, that Washington is seeking expanded Chinese purchases of American soybeans and Boeing jets, as well as a relaxation of Beijing's export controls on rare-earth elements essential to the manufacturing of electronics.
China, which dominates the flow of rare earths, choked them off last year in response to Trump's tariffs. U.S. manufacturers that rely on them suffered. Senior U.S. officials said China's adherence to a trade truce Beijing and Washington struck late last year in South Korea -- where China agreed to a one-year suspension of its global export controls on the critical minerals -- is top of mind for the U.S. heading into the talks.
Beijing is expected to seek reduced tariffs and a loosening of U.S. export restrictions on high-tech parts, particularly chip-making equipment and AI-related gear.
Trump has signaled he wants China to buy more American oil and gas, specifically highlighting a potential large-scale transaction for Alaskan energy as part of the trade truce reached in late 2025. Washington is concerned broadly about China's continued purchasing of Russian oil, which provides a critical financial lifeline to Moscow.
China has long been reliant on cheap energy from U.S. adversaries. As of early 2026, imports from Russia and Iran, combined with disrupted supply from Venezuela, accounted for more than a third of China's total oil imports.
Some American corporate leaders have expressed concern that the U.S. isn't further along with identifying concrete goals to be achieved at the summit. The U.S. also hasn't yet prepared a commercial delegation to attend the meeting with Trump, as happened in his first term, though Trump could still direct one to be put together.
U.S. officials disputed the notion that planning is lagging. A senior U.S. official said the administration is moving deliberatively to ensure talks are substantive.” [1]
1. World News: U.S. May Press China on Russia Deals. Wei, Lingling; Bade, Gavin. Wall Street Journal, Eastern edition; New York, N.Y.. 06 Mar 2026: A8.
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