Trump Administration Allows Russian Diesel Exports Under Temporary License

The United States has approved the return of Russian diesel exports to global and US markets through a temporary sanctions license, a move aimed at easing diesel prices but expected to have limited supply effects, according to an analysis published by Les Affaires.

The agreement allows more than 300,000 tonnes of diesel immediately, followed by 500,000 tonnes in November, one million tonnes afterward and up to three million additional tonnes if Russian refinery conditions permit, according to Les Affaires.

The US Treasury asked the Office of Foreign Assets Control to issue a temporary general license that relaxes energy sanctions affecting Moscow, according to Les Affaires. The measure was designed by the White House to address diesel costs affecting truckers, farmers and households.

Market effects have appeared mainly in fuel pricing margins. Les Affaires reported that US diesel margins weakened after the announcement as markets responded to expectations of additional refined fuel availability.

Supply estimates cited by Les Affaires, based on figures referenced from The New York Times, indicate the additional volumes would equal about 72,000 barrels per day in October, 124,000 barrels per day in November, and between 240,000 and 720,000 barrels per day afterward.

Those volumes remain small compared with global fuel consumption. Les Affaires reported that worldwide fuel use is around 30 million barrels per day, meaning the agreement alone would not significantly alter overall market conditions.

The potential impact on consumer prices is also limited because the agreement changes supply distribution rather than restoring lost refining capacity or resolving logistics disruptions between the Middle East and Asia, according to Les Affaires.

Russian export capacity remains uncertain because refinery damage has affected production. Les Affaires cited the International Energy Agency's estimate that Russian diesel output has already declined by about 30%.

The agreement also carries geopolitical implications because it provides Moscow with renewed market access and revenue while Western sanctions had aimed to reduce financial support linked to Russia's war in Ukraine, according to Les Affaires.