Yves here. The apprehension shown by U.S. corporations regarding Russian diesel imports underscores why Iran remains cautious about the U.S.’s recurring promises of sanctions relief. The Trump administration made it evident that presidential waivers could be revoked at any time. Consequently, if Iran were to undertake irreversible actions, such as diluting its enriched uranium, the U.S. could benefit while retracting its concessions. The Russian diesel situation differs significantly because, in this case, the U.S. is the primary market, and Congress has instituted prohibitions that cannot simply be circumvented by an executive order or Treasury waiver. Conversely, the primary objective of the initial sanctions relief for Iran was to alleviate punitive measures against foreign buyers, particularly banks involved in processing payments.
Brett Erickson elaborates on Twitter:
NEW ANALYSIS: One common misconception regarding the waiver of sanctions—whether concerning Russia or Iran—is the slow and incomplete acceptance from the private sector.
Two major factors contribute to this: Reputational Risk and Legal Risk.
Particularly regarding the Iranian sanctions waivers, like General License U, which lifted sanctions on Iranian oil at sea on March 20th, and General License X that eased oil sanctions—along with waivers for banking, insurance, and transport—under the Memorandum of Understanding on June 22nd, the stigma of being the company purchasing Iranian products is not appealing to many.
This situation parallels the context of sanctions against Russia. General License 134 A/B/C/D, as well as the diesel waiver under General License 135, has seen only limited private sector adoption due to reputational and legal concerns.
There’s been considerable advocacy from members of Congress and lobbying groups in the United States, urging companies to navigate the potential legal pitfalls of purchasing Russian diesel under GL-135. As @GasBuddyGuy correctly points out, the adoption of these much-heralded but minimally effective Russian diesel waivers has been sporadic at best. As I expressed to The Washington Post shortly after GL-135 was announced, “Trump is willing to undermine his own sanctions for what amounts to a rounding error in global energy markets. That speaks volumes about his desperation.”
Kpler posits that the volume of Russian diesel exports has increased enough to potentially lower prices, allowing Trump to celebrate a victory, even if most experts suggest that the influence of the Russian diesel scheme on U.S. diesel prices would be minimal.
🛢️ Russian diesel exports could affect prices
A potential spike in Russian #diesel exports in November could alter global trade dynamics and exert renewed pressure on pricing in the Atlantic region.
Russian diesel shipments in October have surpassed three times their September levels, driven by improved refinery outputs. Increased exports might restore supply to the Mediterranean and Brazil, where reduced availability from Russia has led to greater reliance on U.S. and Indian barrels. Brazil alone could recapture approximately 146,000 barrels per day of Russian diesel, which would alleviate the demand for U.S. Gulf Coast exports and enable domestic stockpiling ahead of winter.
While the added supply might suppress diesel and gasoil prices, the jet fuel market is unlikely to experience similar relief. Persistent supply constraints could widen the jets’ fuel price premiums over diesel in Europe and the U.S.
Stay ahead of the market with #Kpler Insight: https://t.co/BFeBsA7VDq
— Kpler (@Kpler) October 30, 2026
Michael Kern underscores the potential legal exposure associated with the deal.
By Michael Kern, who has over a decade of experience analyzing the intersections of energy and technology, with contributions to outlets such as Bloomberg, NASDAQ, CNN Money, Business Insider, and The Guardian. Originally published at OilPrice
- A tanker carrying nearly 40,000 metric tons of Russian diesel is set to arrive in New York on November 7, a mere four days after the midterms, and no buyer has been publicly identified.
- Treasury’s General License 135 permits these imports, but the 2022 Ending Importation of Russian Oil Act prohibits them by law, exposing importers to potential penalties for five years.
- Opposition spans both parties, with 12 senators, six of whom are Republicans, urging Trump to annul the agreement. Thus, the legal implications do not solely depend on the election outcomes.
A Malta-flagged vessel named Agioi Fanendes departed from the Russian port of Primorsk on October 22, loaded with nearly 40,000 metric tons of ultra-low-sulfur diesel. Ship-tracking data indicates that it is set to arrive at the Port of New York and New Jersey on November 7, shortly after the midterm elections. To date, no one has publicly disclosed the buyer of the fuel, and Senator Richard Blumenthal, D-Conn., has requested that the ship’s owner disclose the identity of the buyer and all parties involved by October 31.
This cargo marks the first tangible result of the deal Trump announced on October 9, following a call with Vladimir Putin originally intended to address a suspected plague outbreak in Russia. Trump made the announcement while emissaries Steve Witkoff and Jared Kushner were in Miami discussing potential resolutions to the conflict in Ukraine. He stated that Russia would immediately commence supplying 300,000 tons of diesel, with future increments to follow, and as he departed the White House for a campaign rally, he remarked, “I want to thank President Putin.” Treasury issued a license to facilitate the trade on the same day.
Washington has exerted considerable pressure on Russian energy for years, and Congress incorporated the import ban into law in 2022, making Trump’s gratitude toward Putin for diesel sound as controversial as one might expect. Within four days, 12 senators—including six Republicans—wrote to Trump, urging him to revoke the deal. While a significant part of the conversation has revolved around political ramifications and impacts on Ukraine, a practical concern often overlooked involves what occurs when the fuel arrives, and whether companies can accept it without fearing repercussions.
The Limitations of a Treasury License
The document at the center of this issue is OFAC General License 135, which permits transactions associated with the sale, delivery, unloading, and importation of Russian-origin diesel, including into the United States, valid through April 7, 2027. This is a Treasury license, not an executive order, which holds profound implications for the ongoing legal discourse. A license may only ease restrictions based on regulations crafted by the executive branch itself.
Most sanctions enforced by Treasury stem from emergency powers that presidents have wielded since 2014. Scott Anderson, a senior editor at Lawfare and a former State Department lawyer, argues that Trump could likely void those sanctions at will, but the import ban presents a different challenge. Joe Biden prohibited Russian oil and fuel imports via executive order in March 2022, followed by Congress enacting the Ending Importation of Russian Oil Act, which enshrined the ban into law for items categorized under Chapter 27 of the tariff schedule, diesel included. Revocation of this ban by a president is contingent upon specific conditions, including a peace agreement accepted by Ukraine’s government and advance notification to Congress, none of which has materialized.
Treasury’s only public rationale so far has been a post on X asserting that the license aligns with prior actions and adheres to all relevant laws. Anderson maintains that while the administration may have a plausible argument resting on language from the 2022 act tying it back to the original executive order, it is uncertain whether a court would uphold it. The White House does have some precedent in its favor, as Treasury issued a series of 30-day licenses earlier in the spring, aimed at mitigating price spikes resulting from the Iran conflict, for Russian oil already loaded on vessels, and these licenses faced minimal scrutiny. However, this current license extends for six months and encompasses future shipments, representing a greater challenge.
Blumenthal articulated this skepticism more directly in his correspondence with the ship owner, declaring that while the president may have issued a license, “only Congress can render it legally valid.”
The license is further restricted to diesel alone, which Anderson interprets as a possible acknowledgment of the Graham Sanctioning Russia and Iran Act, the sanctions legislation signed by Trump in September. This law presents a definition of crude oil that excludes diesel, allowing the administration to maintain that it isn’t contravening the statute’s wording—although whether it respects the intent is a more complex issue.
Assuming Responsibility for the Cargo
Trump himself appeared to hedge earlier this month regarding the U.S. responsibilities, telling reporters that the arrangement wasn’t solely his and was “a deal for the world,” a statement that stands in contrast to the tanker heading for New York Harbor. If the fuel does arrive, someone will need to take ownership of it, a terminal must permit its docking, a bank has to facilitate the payment, and an insurer is required to cover the ship, with each entity facing potential legal liabilities. The White House did not clarify who would finance the fuel at the announcement, and the identity of the initial cargo buyer remains undisclosed.
Importing goods contrary to the law invites criminal penalties under federal customs regulations in addition to civil ramifications, and Anderson notes that while Trump could theoretically employ his pardon power to shield importers from criminal liabilities, this wouldn’t protect them from civil penalties, which may encompass the total value of the cargo along with the forfeiture of the vessel involved. Customs enforcement can be pursued for up to five years following a shipment’s arrival.
This five-year window serves as the crux of the question regarding potential liabilities a company may encounter after the elections. This timeframe is independent of which party controls Congress, meaning that a president taking office in January 2029 would still have years remaining on the clock for a cargo arriving in November.
Lawmakers have proactively paved the way for accountability, commencing October 24 when six senators and a House member requested major banks and port authorities in Texas and New York to retain shipping documents, contracts, and correspondence with government officials linked to the deal. Subsequently, Blumenthal demanded that the ship’s owner, the Greek company EASTMED, disclose the seller, buyer, charterer, insurer, terminal operator, and distributor, as well as confirm whether any federal agency had provided it with directives. As Treasury has affirmed support, those needing to engage with the cargo are being advised to retain relevant records.
Allies introduce their own complexities, as the UK and EU sanctions on Russian diesel remain active, which Clyde & Co asserts prohibits banks and insurers located there from facilitating the shipment unless it complies with the price cap. Additionally, one of the three vessels scheduled for next month, the Leruo, is currently sanctioned by the UK, EU, and Canada.
Delivering Post-Election
Three tankers loaded with approximately 140,000 metric tons are expected to reach U.S. ports between November 7 and November 11, indicating that unloading will occur after the polls close, although delivery dates have fluctuated in various reports. NBC News previously indicated the Agioi Fanendes might arrive around November 10, while gCaptain retracted earlier reports of another cargo due in Norfolk on November 2. Russia views these shipments as routine; Kremlin spokesperson Dmitry Peskov has stated that more tankers will follow routinely, with Putin’s own readout of the call indicating that Russia is prepared to supply oil and oil products to both American and global markets, extending beyond just diesel.
The Democrats are favored to win the House, with Polymarket traders assigning a 93 percent probability earlier this month and a 65 percent chance of flipping the Senate. A Democratic-controlled House would have the ability to issue document requests and subpoenas; a comprehensive sweep would compound challenges for the deal, empowering committee chairs in the Senate to pursue the same inquiries.
However, a new Congress would not start until January, and Trump would maintain veto power, making the midterm elections more of a pressure point than a definitive trigger. Moreover, the opposition is not strictly partisan. Republican Senators Susan Collins of Maine, Lisa Murkowski of Alaska, Thom Tillis of North Carolina, and John Curtis of Utah have all joined in a bipartisan statement indicating that the imports contravene the 2022 ban. Representative Brian Fitzpatrick, R-Pa., has pledged bipartisan legislation to prevent Russian oil purchases, while Senate Armed Services Committee Chairman Roger Wicker of Mississippi anticipates that the imports may never materialize. In response to GOP critics, Trump has referred to them as “Republicans that can’t really be serious.”
What occurs once the cargo lands might also impact who may sue, as Anderson suggests competitors such as biodiesel and renewable diesel producers could potentially have standing to sue if imports commence. Importers have also observed that the current administration’s regulations can shift rapidly. The Graham act passed the Senate with a significant majority and directed Trump to implement new tariffs on the largest buyers of Russian oil by October 18. Just two days later, Trump issued an executive order that established those duties while simultaneously waiving them, leading anyone who has recently imported goods under the constantly changing tariff rates to be very cautious. The risk of committing to a cargo while new regulations are being enacted poses significant challenges, especially when the penalties could even involve the vessel itself.
The Impact on Ukraine
Anderson argues that the most substantial repercussions will be felt by Ukraine, where Trump rapidly announced an “energy ceasefire” without consulting Kyiv or Moscow, following Putin’s suggestion that assaults by Ukraine on Russian refineries were driving up global prices. Ukraine initially exercised restraint but resumed attacks on Russian refineries by October 15, while Russia continued to target Ukrainian energy assets. Trump has since implicated Volodymyr Zelenskyy for America’s rising diesel costs.
Moreover, Washington appears to be alleviating pressure on Moscow while London and Brussels maintain theirs, which greatly affects allied dynamics. The 12 senators who appealed to Trump to retract the deal referred to it as “a betrayal of the people of Ukraine.” British Conservative leader Kemi Badenoch labeled it a disappointing regression concerning Russian oil sanctions.
The Scale of Diesel Supply
From the White House’s perspective, the justification is straightforward, albeit not without validity. Diesel prices had surged above $6 per gallon in early October, exacerbated by the conflict with Iran that has disrupted supply through the Strait of Hormuz. A Trump administration official informed Semafor that the procurement of Russian fuel is an unavoidable outcome of that conflict. Press Secretary Taylor Rogers has described the deal as a robust strategy to supply the global market and mitigate prices, viewing it as one of several levers, alongside an executive order relaxing rules on red-dyed diesel and exhorting Germany and France to release reserves.
However, the supply calculations come under scrutiny. According to the International Energy Agency, Russian diesel production has decreased by approximately 30 percent, due to both Ukrainian drone strikes targeting its refineries and prior Russian export restrictions meant to support its domestic market. This raises uncertainty regarding Russia’s capacity to fulfill the commitments outlined in the deal. Even assuming all promised shipments arrive, the total 4.8 million tons of diesel mentioned by Trump would equate to only about ten days of U.S. demand, and Goldman Sachs estimates that it may only reduce prices by about $1 to $2 per barrel.
As of mid-October, Anderson noted that global diesel prices had not changed appreciably since the announcement. The first tanker is even smaller, estimated at roughly 300,000 barrels, which has already triggered a Senate inquiry and faces the five-year liability clock that surpasses the scope of the license. Someone in New York will eventually have to decide if a few hours’ worth of diesel is worth five years of scrutiny.
