Trump Reviews Russian Oil Ban Law Amid Limited License for Russian Diesel Through 2027
Key Facts
U.S. President Donald Trump questioned the law banning Russian oil imports, saying on November 6 that he would review it without announcing an end to the ban, setting a timeline or proposing an amendment. The Free Press Journal quoted him as saying, "That could make the law very bad. I'll take a look at it, certainly." The comment comes as a U.S. license allowing specified transactions involving Russian diesel remains in effect through April 7, 2027. The license does not generally reopen trade in Russian petroleum products, nor does it by itself resolve the dispute over whether it complies with the 2022 law. The issue thus combines a possible political review of the existing law with a limited exception issued by the Treasury Department weeks before Trump's remarks.
The Treasury Department's Office of Foreign Assets Control issued General License No. 135 on October 9. It allows the sale, delivery, offloading and importation of Russian-origin diesel through 12:01 a.m. Eastern time on April 7, 2027. The Treasury Department said the waiver is consistent with previous actions and "complies with all applicable laws." Its scope, according to the report, leaves specified diesel transactions permitted without lifting restrictions on other Russian petroleum products. That puts the legal question at the center of the dispute: Is the license sufficient to cover the transactions it permits, or does the law require another route to end the ban?
The legal framework dates to the Ending Importation of Russian Oil Act, enacted on April 8, 2022. The law prohibits imports of Russian products classified under Chapter 27 of the U.S. tariff schedule, but allows the president to end the ban after submitting a certification to Congress. The law provides that termination takes effect 90 days after the certification is submitted, unless Congress passes a resolution rejecting it. New Jersey Gov. Mikie Sherrill says Chapter 27 includes diesel oil and that the law does not give the president or Treasury Department general authority to bypass the ban through licenses. She also says the termination process is tied to a presidential certification containing conditions related to Russia's withdrawal from Ukraine, putting the limits of the license's authority at the center of a dispute between the state and the administration.
Trump announced on October 9 that he had reached an agreement with Russian President Vladimir Putin to make more than 300,000 metric tons of Russian diesel immediately available to U.S. and global markets, with larger shipments expected later. On October 21, Russian Deputy Prime Minister Alexander Novak said the first tanker bound for the United States would carry 40,000 metric tons, with other shipments to follow. But the Associated Press said in a report dated November 5 that it had not confirmed delivery of any shipment to the United States. The supply announcement therefore remained separate from proof that fuel had actually reached the U.S. market. The report quoted Putin as saying global diesel prices fell by 5%-6% after the agreement, an estimate attributed to the Russian president.
The opposition became a practical challenge at East Coast ports. In a letter dated November 2, Sherrill warned port and terminal operators in New Jersey against receiving Russian fuel, saying the state would use its legal and regulatory authority to oppose imports. Her letter argued that buying or offloading the fuel could expose companies and individuals to civil and criminal penalties, and that the state would seek to prevent its ports and infrastructure from being used for that purpose. At the federal level, a group of bipartisan senators urged Trump to cancel the agreement. The lawmakers warned that facilitating imports could expose companies to civil or criminal liability, as well as subsequent congressional investigations.
The issue comes as Reuters, citing GasBuddy, reported that the U.S. diesel price reached $6.28 per gallon on November 3, midterm election day, a record level according to the report. Reuters linked that to tight global inventories and U.S. prices near record levels ahead of the election. In market data, the New York Harbor ultra-low-sulfur diesel futures contract settled at $4.3519 per gallon on November 5, compared with $4.2055 on November 4. Those settlements are for a futures contract at New York Harbor, while the figure reported by Reuters refers to the U.S. diesel price on election day. Whether Russian supplies can ease price pressures will depend on shipments arriving amid the legal dispute and New Jersey's objections.