US and Russia Agree on Shipment of 1.8 Million Tonnes of Diesel

US President Donald Trump announced a deal with his Russian counterpart, Vladimir Putin, under which Russia will supply 1.8 million tonnes of diesel to the US market. The shipment will take place in stages: 300,000 tonnes immediately, 500,000 tonnes in November, and 1 million tonnes in a later phase. To allow these operations, the Treasury Department, through the Office of Foreign Assets Control (OFAC), immediately issued a temporary general license exempting these shipments from the sanctions currently in force against Russia.

The announcement came just three weeks after Trump signed a law authorizing him to impose 100% tariffs on countries that purchase Russian oil or natural gas, a measure that did not include diesel among the sanctioned fuels. Trump linked the deal to lower diesel prices for Americans, particularly farmers, ranchers and truckers, amid political pressure over fuel costs ahead of the November midterm elections. Combined, the agreed volumes are equivalent to about 45 MR tanker voyages.

Trump also stated that Russia and Ukraine had agreed to an immediate energy ceasefire, although Ukrainian President Volodymyr Zelensky said he learned of the announcement through Trump's statement and that Kyiv maintained its position of suspending attacks on Russian refineries only if Moscow halted strikes on Ukraine's power grid. Zelensky criticized the diesel supply deal, arguing it could embolden Russian attacks on Ukraine. In the United States, Republican lawmaker Don Bacon said it was time to impose more sanctions, not lift them, while several analysts considered it unlikely that the deal would lead to a sustained price drop given the limited volumes involved.

The deal effectively reverses the diesel export ban that Russia had imposed on itself on July 8 and which remains formally in force, in a country that exported 2.6 million tonnes of the fuel monthly before 2025. Russia is facing a domestic diesel shortage and has resorted to relaxing production standards and importing fuel from India, Korea, Morocco and Turkey. Production is concentrated in six major refineries, several of which have been hit by Ukrainian drone and long-range missile strikes, cutting national diesel output by nearly 30% in recent months. Exports are channeled mainly through the ports of Primorsk, Vysotsk and Ust-Luga in the St. Petersburg area, while Tuapse and Novorossiysk, on the Black Sea, are operating under severe constraints due to Ukrainian sea drone attacks, and the Far East ports of Nakhodka and Kozmino remain so far unaffected.