Russian diesel: the US lifts sanctions, but the first cargo covers 14 hours of use

The United States has lifted its sanctions on Russian diesel for six months. On Friday the Treasury’s Office of Foreign Assets Control issued General License 135, which allows the sale, delivery, offloading and import of Russian diesel, “including importation into the United States”, until 12:01 a.m. on 7 April 2027. According to the Associated Press, it is the first easing of US sanctions on Russian diesel for longer than the usual 30 days since February 2022.

The licence followed a phone call between Donald Trump and Vladimir Putin on Friday evening. The two leaders “thoroughly discussed” large economic projects, “including possible supplies of Russian oil products to the US and global markets”, the Kremlin said in its account of the call.

What Trump says Russia will send

Trump set out the volumes in a post after the call, the Associated Press reported: more than 300,000 tonnes of diesel at once, 500,000 tonnes in November, then 1m tonnes “immediately thereafter”, and 3m tonnes later. “Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority,” he wrote. The midterm elections are on 3 November.

Russia has banned diesel exports since July, because Ukrainian attacks on its refineries have cut output. Alexander Novak, a deputy prime minister, said Russia is now “immediately starting to lift restrictions on diesel exports ahead of schedule”, the AP reported, citing Tass.

The licence keeps one limit. It does not allow any payment out of US accounts of Russia’s central bank, its National Wealth Fund or its finance ministry.

How much diesel that is

The numbers are small next to American demand. A tonne of diesel is about 7.23 barrels, according to the UN’s conversion factors. So the first 300,000 tonnes are about 2.2m barrels. The US used 3.65m barrels a day of distillate fuel, mostly diesel, in the week to 2 October, EIA data show. The first cargo covers about 14 hours of that.

Russian diesel promised by Trump, in days of US use. Source: Volumes from Trump's post, as reported by the Associated Press. Converted at 7.23 barrels a tonne (UN) and US distillate use of 3.65m barrels a day in the week to 2 October (EIA).

First 300,000 tonnes	0.6
November, 500,000 tonnes	1.0
Next 1m tonnes	2.0
Later 3m tonnes	5.9
All 4.8m tonnes	9.5

Source: Volumes from Trump's post, as reported by the Associated Press. Converted at 7.23 barrels a tonne (UN) and US distillate use of 3.65m barrels a day in the week to 2 October (EIA).The Macro Notebook

All four batches together come to 4.8m tonnes, or about 35m barrels. That is about nine and a half days of US use, spread over months. The diesel also does not have to go to America: the licence covers sales anywhere.

The US has not needed much Russian diesel even in normal times. Imports from Russia averaged 24,000 barrels a day in 2021, the last full year before the ban, EIA figures show. Imports of distillate from all countries were 118,000 barrels a day in the latest week.

Why diesel prices matter now

Diesel is the fuel of the shortage. The average US retail price was $6.20 a gallon on 5 October, according to the EIA. It set a record of $6.53 on 21 September, well above the 2022 peak of $5.81. A year ago it was $3.71. As we reported on 4 October, Trump had already ruled out a ban on US diesel exports.

Analysts doubt the Russian supply will change that much. “I think probably not much,” Clayton Seigle of the Center for Strategic and International Studies told the AP, when asked about the effect on prices. He called the deal a “great benefit to Russia and to Putin”.

The backlash

The licence cuts against a sanctions law Trump signed in September, which directs tariffs of up to 100% on the five largest buyers of Russian oil and gas, the AP reported. Volodymyr Zelensky called the deal “a weak decision by strong partners”. The Democratic senators Chuck Schumer, Jeanne Shaheen and Elizabeth Warren said “Enough is enough” and called it a betrayal.

What to watch next

The EIA’s weekly survey of pump prices will show whether diesel keeps falling from its September record. Watch for the first Russian cargoes once the export ban is lifted, and for whether they head to the US or to Europe and Latin America. The licence runs out on 7 April 2027, unless the Treasury renews it.