NYMEX ULSD crack weakens after Trump announces additional diesel supplies from Russia

The NYMEX front-month ultra low sulfur diesel crack against WTI crude tumbled Oct. 9 after US President Donald Trump said Russia would supply additional diesel to the market.

At 1933 GMT, the NYMEX ULSD crack was down $6.45/barrel on the day to $96.80/b.

"I have just concluded a highly successful discussion with President Vladimir Putin, of Russia, wherein it was agreed 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," Trump said on his Truth Social media account. "Additionally, based on the condition of their Diesel Refineries, Russia will then deliver, within a short period of time, 3,000,000 Tons of Diesel Fuel."

"That is a big deal," Trump said to reporters outside the White House a few hours later, before a trip to New York to attend a GOP rally.

"I want to thank President Putin, to be honest with you, we have massive amounts of oil coming into our country, and it's diesel, which is what we want," he said.

To allow Russian diesel on the market, the US Treasury Department's Office of Foreign Assets Control on Oct. 9 issued a sanctions waiver, General License 135, allowing the sale, delivery and importation of diesel fuel, including importation into the US, until April 7, 2027.

The Russian government confirmed in a statement on Oct. 9 that Moscow was willing to supply oil and petroleum products to the US and global markets following the telephone conversation between Trump and Russian President Vladimir Putin.

" I am convinced this will have a positive impact on the entire global economy," Putin said, according to the statement.

However, the Russian statement did not confirm the 4.8 million mt of diesel announced by Trump, nor did it specify delivery schedules or volumes of individual petroleum products.

Nearly half of Russia's refining capacity remained offline at the end of September, according to a S&P Global Energy CERA's Eurasia Refined Products outlook issued Sept. 30.

Ukrainian drone attacks have pushed 3.1 million b/d of Russia's refining capacity offline, the outlook said. In the third quarter, diesel loadings averaged 140,000 b/d, 500,000 b/d lower than a year ago.

"Russia has maintained a diesel export ban since July, and on September 30, extended it again through the end of October," the report said. "Regardless of the extension of the ban, ongoing Ukrainian drone strikes and higher domestic consumption due to the harvest make it unlikely that Russian diesel exports recover to pre-crisis levels by end-year and are likely to remain constrained through 2027."

'Another short-term, small Band-Aid'

Russian diesel and gasoil exports rebounded in the week to Oct. 1. Russia's diesel/gasoil seaborne exports were 149,000 metric tons in the week ended Oct. 1, up from 81,000 mt the previous week, according to S&P Global Commodities at Sea data. This marked the fourth-largest weekly loading since Russia introduced its full ban on diesel and gasoil exports at the beginning of July.

CAS data shows Russian exports ran at around 1 million b/d during the first half of the year, prior to compounding refinery outages. Russian export volumes have averaged around 550,000 b/d since July.

The US has been boosting diesel exports, primarily to Europe and Latin America, to fill the gap. The US exported 45.9 million barrels of diesel in September, down from 49.3 million barrels in August, but up from 29.1 million barrels in February, CAS data shows.

While the Trump administration was said to have been considering a US diesel export ban to lower US prices, Energy Secretary Chris Wright said Sept. 23 that the US was unlikely to impose a ban and was considering a range of options to keep more supply on the market.

While ULSD crack spreads fell on Oct. 9, the market remains tight. In October 2025, for instance, the US Gulf Coast ULSD crack against WTI averaged $32.16/b.

"It looks like another short-term, small Band-Aid note as the administration grasps for anything to make the diesel issue look better than it is," said Darrell Fletcher, analyst at Bannockburn Capital Markets. "Even if it is reality, it will be a small short-term fix to the global supply gap."