Russian Diesel Output Heads Toward 180,000 Tons a Day as Exports Resume
Key Facts
The Kremlin said the first tanker carrying Russian diesel had sailed to customers and that supplies would continue regularly, restoring Russian shipments to the U.S. market after a hiatus of more than 3 years. Kpler said the tanker was bound for New York, with arrival expected on November 7, making it the first Russian diesel shipment to reach the United States since July 2023. Russian Deputy Prime Minister Alexander Novak said the first shipment amounted to 40,000 tons, or about 300,000 barrels. That volume is equivalent to about 7% of U.S. daily consumption, which stands at about 4 million barrels, according to his estimate. The move comes as Russian refineries begin to increase output after export quotas were approved in mid-October, according to two industry sources cited by Reuters.
Industry-source data show Russian diesel output fell in the first half of October to about 160,000 tons a day, from 175,000 tons a day in September. After export quotas arrived in the middle of the month, production began rising toward 180,000 tons a day, Reuters reported. The two sources said domestic consumption typically falls in October to about 140,000 tons a day. On that basis, at least 40,000 tons a day, or more than 1 million tons during the month, could be available for export, they estimated. This estimate reflects potential seasonal capacity to increase external supplies, but does not establish that all of the surplus will go to the United States or that the quotas were issued under a contractual commitment to it.
The resumption of shipments came as U.S. sanctions restrictions on Russian diesel were temporarily eased. The Associated Press reported that the U.S. Treasury Department issued a license allowing Russian diesel to be supplied to the global market and exempting from sanctions shipments that had been loaded onto tankers by October 9. The exemption remains in effect until April 2027, the agency reported. The license allows covered shipments to pass during the specified period, while supplies remain dependent on Russia's ability to produce and transport fuel and on the continued availability of buyers. The open report did not establish that Russian export quotas are a contractual condition for supplying fuel to the United States.
Russian diesel production came under pressure from repeated Ukrainian drone strikes on refineries, according to the Associated Press, which said the resulting fuel shortages had eased. Russia was the world's second-largest diesel exporter after the United States before it began restricting foreign sales over the summer to meet domestic demand, Reuters reported. That puts the return of shipments in the context of a shift from export restrictions to a resumption as domestic consumption typically declines in the autumn. The Kremlin said supplies would continue regularly, but the estimate of more than 1 million tons available for export refers to supply potential during October, not a confirmed schedule for subsequent shipments. The first tanker’s cargo is therefore a tangible sign that flows are resuming, while no details have been provided on the timing or volumes of later shipments.
The first shipment is not expected to have a significant impact on U.S. fuel prices. Energy policy experts said the deal is unlikely to materially lower high prices at the pump or in other markets, according to the Associated Press. The limited cargo explains that assessment: 40,000 tons amounts to only about 7% of U.S. diesel consumption in a single day, based on the figures Novak cited. Russian supplies give the market an additional source, but the first shipment remains small relative to U.S. daily consumption. The tanker is expected to arrive in New York on November 7, while the Kremlin said supplies would continue regularly.