U.S. sanctions against Russian-Diesel are temporarily terminated until April 7, 2027 due to an agreement between President Donald Trump and Russian president Vladimir Putin. The move follows a world record breaking a week ago in which 15 other countries enacted similar measures to boost supply of fuel as prices rose around the world.
On Friday, the US Treasury Department released its authorization, which allows for the specified activity of “selling, delivering, unloading and importing” Russian diesel in the United States. It will relieve some of the restrictions but won’t lift the sweeping U.S. sanctions on Russia.
Trump claimed that Russia has pledged over 300,000 tonnes of diesel as soon as possible, with another 500,000 tonnes delivered in November and then one million within a short time. He also said Russia has the ability to provide an additional three million tonnes, depending on the condition of the refineries.
Diesel prices have risen in international markets due to the disruption in fuel production and supply, and the announcement comes at that time, “fueller” said. Dodie, Ukrainian attacks on Russian refineries have impacted capacity, and Russia has constrained diesel exports. Concerns have also been raised about fuel availability with attacks by Houthis militants on facilities in Saudi Arabia.
For the Trump administration, the order is economically and politically momentous in that it’s trying to reduce the price of fuel before the November elections for the midterm polls. Diesel price hikes increase the transport and agriculture and logistics expenses of businesses and consumers.
But, the effect the planned Russian deliveries will have on global commodity prices is still unclear. Deliveries are subject to availability and refining capacity and the execution of the announced arrangement.
The temporary authorisation is set to expire April 7, 2027. It allows certain types of transactions dealing with diesel but it is not a full removal of US sanctions on Russia.