Key facts
- Two tankers carrying Russian diesel diverted from U.S. destinations; a third lacks a confirmed discharge port.
- Treasury's OFAC License No. 135 authorizes Russian diesel transactions through April 7 next year.
- A 2022 law, the Ending Importation of Russian Oil Act, bans imports of Russian energy products including diesel.
- New Jersey Governor Mikie Sherrill urged port operators to turn away the cargoes in a November 2 letter.
- U.S. distillate inventories fell by 3.6 million barrels to 99.3 million barrels in the week ended October 30.
- The national average retail diesel price was $6.17 a gallon on November 9, per AAA.
Two tankers carrying Russian diesel have diverted from their intended American destinations, while another remains in the North Atlantic without a declared unloading port, complicating President Donald Trump's agreement with Vladimir Putin to ease fuel prices. The Treasury has authorized Russian diesel transactions, but lawmakers warn that companies handling U.S. imports could still violate a congressional ban.
The Russian tanker Talisman and Sierra Leone-flagged Leruo departed the Baltic port of Primorsk in October, initially declaring destinations on the U.S. East Coast. By November 5, Leruo was indicating Brazil, while Talisman had entered the Mediterranean. According to AFP's reporting, Talisman passed through the Strait of Gibraltar on November 2, before the U.S. midterm elections. The Malta-flagged Agioi Fanendes also lacks a confirmed discharge destination. Maritime Optima's vessel tracker, checked on November 9, listed it underway in the North Atlantic with no reported destination. CNN reported on November 8 that the vessel was carrying approximately 300,000 barrels and had slowed in recent days. Kpler analyst Matt Smith attributed the uncertainty surrounding the cargoes to prospective U.S. buyers' concerns about legal consequences.
Moscow continues to promote the agreement publicly. On Monday, Deputy Foreign Minister Alexander Pankin described it as a potential foundation for gradually restoring business relations with Washington, Reuters reported. Reuters nevertheless described the arrangement's practical implementation as unclear following the tanker diversions.
Trump announced the deal on October 9, saying Russia would immediately make more than 300,000 metric tonnes of diesel available to U.S. and global markets, followed by 500,000 tonnes in November and another 1 million tonnes thereafter. Those quantities were not exclusively allocated to American buyers. Reuters identified Agioi Fanendes as carrying approximately 40,000 tonnes loaded at Primorsk on October 22.
To facilitate the arrangement, the Treasury Department's Office of Foreign Assets Control issued License No. 135. It authorizes covered transactions involving the sale, delivery, offloading and importation of Russian-origin diesel, including imports into the United States, through April 7 next year. The license applies to prohibitions under two sets of Russia-related sanctions regulations.
The dispute concerns a separate statutory restriction. A 2022 law, the Ending Importation of Russian Oil Act, bans imports of Russian products classified under Chapter 27 of the U.S. tariff schedule, which covers energy products including diesel. It provides a specific process for terminating that prohibition. Under that process, the president must certify that Russia has reached an agreement to withdraw its forces and cease military hostilities that Ukraine's government accepts; poses no immediate military threat of aggression to a NATO member; and recognizes Ukrainians' right to choose their government freely. The law also requires consultations with designated congressional committees and an explanatory report at least 45 days before certification. Termination takes effect 90 days after certification unless Congress enacts a joint resolution of disapproval during that period. Lawfare's analysis concludes that the statutory restrictions appear to remain in place. It identifies a possible administration argument involving the law's reference to implementation measures under the original executive order, while questioning whether that language permits the new license. Treasury maintains that its authorization complies with applicable law. AP reported on November 5 that no court had ruled on the dispute.
New Jersey Governor Mikie Sherrill has urged port and terminal operators to turn away the cargoes. Her November 2 letter warned that purchasing or unloading Russian fuel could expose businesses and individuals to civil and criminal penalties. She also pledged to use New Jersey's legal and regulatory powers to prevent facilities in the state from facilitating imports she considers unlawful. A bipartisan group of federal lawmakers, including Senator Jeanne Shaheen, Republican Senator Thom Tillis and Representative Gregory Meeks, has separately warned banks, port authorities and fuel distributors about potential legal action, congressional investigations and civil or criminal liability. Recipients included JPMorgan Chase, Bank of America and Citigroup. The lawmakers also demanded preservation of records relating to proposed or completed Russian diesel imports. These warnings leave companies weighing the Treasury's authorization against the risk of enforcement later, particularly given the midterm election weakening of the Trump administration.
Meanwhile, American diesel supplies remain tight. The national average retail price stood at $6.17 a gallon on November 9, down from $6.29 a week earlier but still close to September's record of $6.53, according to AAA. U.S. distillate inventories, which include diesel and heating oil, fell by 3.6 million barrels to 99.3 million barrels in the week ended October 30. Stocks stood roughly 13% below their five-year seasonal average. With winter heating demand approaching, the dispute over Russian imports leaves another prospective source of fuel facing an uncertain route to American consumers.