Russia plans to send first diesel tanker to United States on October 22
Key Facts
Russian Deputy Prime Minister Alexander Novak said the first diesel tanker bound for the United States is scheduled to leave port on October 22, according to Interfax. He added that the tanker has a displacement of 40 thousand tonnes, as part of arrangements to supply Russian fuel to the U.S. market. He described the signing of the contract as being in its final stages, while talks on supplies continue. He said Russian companies are negotiating with potential buyers of Russian diesel to carry out these deliveries. Negotiations are also taking place between the Russian and U.S. energy ministries, according to Novak, who discussed both the commercial and government tracks.
The shipping arrangements follow the partial lifting of Russia's diesel export ban, which took effect on October 10, according to Interfax. On the U.S. side, the Treasury Department issued Russia-related General License No. 135 to allow transactions involving the fuel. The license covers transactions involving the sale, delivery and unloading of Russian diesel, as well as its import into the United States. Novak had previously explained that carrying out the deliveries requires signing contracts, loading the fuel, chartering a vessel and dispatching it. He estimated that completing these steps would take between two and 3 weeks, according to his earlier remarks carried by Interfax.
Russia eased the restrictions following pressure on its domestic fuel market, where a seasonal increase in consumption coincided with unplanned refinery repairs, according to Interfax. Against that backdrop, Russian regions imposed limits on the quantities of fuel sold at filling stations. The Associated Press cited the International Energy Agency as saying Russian diesel production had fallen by about 30%. Novak linked the easing of export restrictions to increased processing volumes at Russian refineries, according to remarks carried by Interfax. He said the accompanying increase in production also means additional tax revenue for Russia's budget.
In the U.S. market, retail diesel prices exceeded $6 a gallon during September, according to a Reuters report published in October. Novak attributed the diesel shortage in the global market to sanctions policy, in remarks carried by Interfax. He also cited attacks on oil refineries and the closure of the Strait of Hormuz as causes of the shortage. On tanker movements, a Reuters report carried by Investing, citing Kpler and London Stock Exchange Group data, said the tanker "Leroo" left the port of Primorsk on October 16 and listed Brazil's Manaus as its destination. The report added that the tanker "Dolunay" departed on October 14 for Turkey's Alanya, according to its declared destination.
In the United States, the agreement faced opposition from both Republican and Democratic senators, according to the Associated Press. A statement protesting the agreement, issued on Sunday following its announcement, was signed by 4 Republicans and two Democrats. On the continuation of the U.S. waiver, Novak said during Russian Energy Week that talks on extending it were not underway at the time. He added in a video interview with Reuters: "It is too early to talk about an extension." In its coverage of the global supply outlook, Reuters cited the International Energy Agency's warning that the diesel shortage could persist into 2027.
As for the expected departure, Russian President Vladimir Putin said during his meeting with Steve Witkoff that the first tankers would leave within two to 3 days, according to Interfax. Putin added in a subsequent statement the same day: "The first tankers will leave within two to 3 days." Novak had identified October 22 as the planned departure date for the first tanker bound for the United States. U.S. authorization for transactions involving Russian diesel runs until April 7, 2027, according to the text of the license issued by the Treasury Department. The authorization expires at 12:01 a.m. Eastern Daylight Time on that date.