Russian diesel imports unlikely to ease US fuel prices

US authorization to import Russian diesel is unlikely to have a material impact on diesel prices in the near term because Russia has little capacity to boost exports, and the US license could also face legal hurdles, energy analysts say.

"The amount of diesel Russia can provide would be a drop in the bucket compared to global demand," said Masha Kotkin, a fellow at the Center for Strategic and International Studies. "If you are asking about US diesel prices, I don't think it's going to make a difference. It is not very much in the scheme of things."

US President Donald Trump said on Truth Social Oct. 9 that "Russia will immediately supply over 300,000 Tons of Diesel Fuel to the American and Global Marketplace, another 500,000 Tons during the month of November, and 1,000,000 Tons immediately thereafter."

The US Treasury Department also issued a sanctions waiver allowing the sale, delivery, and importation of diesel fuel, including importation into the US, until April 7, 2027.

Russia has modest excess volumes to send to the global market, Rachel Ziemba, a senior adviser with Horizon Engage, told Platts, a part of S&P Global Energy, in an email.

The proposed volumes for October and November seem similar to recent exports, Ziemba said. Scaling up to the volumes for December and the first quarter would require the repair and restart of refining capacity and an energy ceasefire, she said.

Russia has only exported 100,000-150,000 barrels/day of diesel in recent months, S&P Global Energy CERA's analysts said Oct. 11. The pledged export volumes are small and may not represent incremental supply above recent levels, they said.

"Of greater impact would be if a lasting energy ceasefire were to be enacted, allowing Russia to repair its refineries and increase production/exports – but that would take many months," the analysts said. Roughly half of Russia's refinery capacity is offline after repeated Ukrainian attacks, the analysts said.

Legal concerns

US lawmakers have raised concerns about the legality of importing Russian diesel to the US. A bipartisan group of six senators led by Senator Jeanne Shaheen (Democrat-New Hampshire), on Oct. 11 issued a statement arguing that Congress explicitly banned Russian energy imports in 2022.

"President Trump's decision to allow Russian diesel imports to the US runs directly counter to that law. The Administration has also failed to consult with Congress or submit any explanation to justify its decision as required by statute," the statement said.

Sanctions on Russia are not like those on Venezuela and elsewhere that can be suspended by the executive branch as desired, said Ellen Wald, president of Transversal Consulting.

The only way Russian petroleum products can legally be imported into the US is if the president submits evidence to Congress that Russia has reached an agreement with Ukraine to withdraw forces and cease military hostilities against Ukraine, among other things, Wald said.

And even then, the ban stays in effect for an additional 90 days, so there is no possible way for Russian diesel to legally enter the US market in October or November unless Congress repeals or replaces the current statute, Wald said.

"This is another of President Trump's attempts to jawbone prices down — more diesel in the global market will relieve the tension on global supplies even if it doesn't reach the US market," Wald said.