U.S. Waives Russian Diesel Sanctions

Washington — The United States on 9 October suspended its sanctions on Russian diesel fuel until next April, after President Donald Trump said he had agreed with Russian President Vladimir Putin on a phone call that Russia would ship large amounts of the fuel to ease high prices.

Hours after Trump's announcement, the Treasury Department's sanctions office issued a document called General License 135. It allows companies to buy, ship, unload and import diesel of Russian origin — including into the United States — without breaking U.S. sanctions, until 12:01 a.m. Eastern time on 7 April 2027.

What a general license is

The United States has barred most dealings with Russia's energy trade since Moscow's full-scale invasion of Ukraine in 2022. Those bans are enforced by the Treasury's Office of Foreign Assets Control, which can punish any company that breaks them. A general license is a blanket exception: it tells everyone, without having to apply, that one specific kind of otherwise-banned deal is now allowed.

The short license, signed by the office's director, Bradley T. Smith, covers diesel deals that would otherwise break two sets of U.S. Russia sanctions rules. It keeps one limit. No payment may be taken from accounts that Russia's central bank, its national wealth fund or its finance ministry hold at U.S. banks.

The Treasury has eased sanctions on Russian fuel shipments several times since the war with Iran began earlier this year, including in March and April. But this is the first such waiver for diesel to run longer than the standard 30 days since the start of the Ukraine war, the Associated Press reported.

What Trump says Russia will send

In a social media post, Trump said Russia would supply more than 300,000 tons of diesel immediately, 500,000 tons in November and another 1 million tons "immediately thereafter," followed by a further 3 million tons "within a short period of time."

"Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority," he wrote.

In a statement released by the Kremlin, Putin said Russia had "confirmed its readiness to supply oil and oil products to the American and global markets." Russian Deputy Prime Minister Alexander Novak told the state news agency Tass that Russia was "immediately starting to lift restrictions on diesel exports ahead of schedule" and could begin supplying the United States in October.

The White House did not say who would pay for the fuel, or whether the November shipments would arrive before the 3 November midterm elections, the AP reported.

Why diesel matters now

Diesel runs most of the trucks, tractors and ships that move food and goods, so its price feeds into the cost of nearly everything. Prices have climbed since the United States and Israel launched air strikes on Iran in February, a conflict now in its eighth month, the U.S.-funded broadcaster Radio Free Europe/Radio Liberty (RFE/RL) reported.

The U.S. average price of a gallon of diesel was $6.23 on Friday, according to the motoring group AAA, after a record $6.52 on 22 September, the AP reported. Diesel futures — contracts that set prices for future delivery — fell about 4 percent after the announcement but stayed more than 110 percent above their level at the start of the year, RFE/RL reported.

Russia was once a major diesel exporter, but it has banned exports since July because repeated Ukrainian attacks on its oil refineries left it short at home. The International Energy Agency says Russian diesel output has fallen by about 30 percent, the AP reported. The United States has not imported Russian oil or gas since 2022.

What it means in practice

For drivers, farmers and businesses, the license is meant to add supply to a tight world market. For Russia, it reopens a source of export income. For the United States, it means Russian diesel can legally land at American ports for the first time since 2022, if buyers choose to take it. RFE/RL noted that a 2022 law banning Russian oil imports unless Russia withdraws from Ukraine may also apply, and that officials' materials did not explain how it fits with the new license.

Ukraine and Congress object

The move came as U.S., Ukrainian and European officials met in Miami to discuss ending Russia's war in Ukraine. Those talks ended on Friday without a breakthrough. U.S. envoy Steve Witkoff called the exchange "productive."

Ukrainian President Volodymyr Zelensky called the waiver a gift to Moscow. "Gifts to Putin will not bring peace or any benefit to the civilized world," he wrote. "I believe our team is simply being used as a smokescreen," he said of the Miami talks.

Last month Trump signed a bipartisan law aimed at Russia's energy income. It directs tariffs of up to 100 percent on the top five buyers of Russian oil or gas, with some exceptions, and sanctions on Russian officials, banks and the so-called shadow fleet of tankers that carry its oil, the AP reported. Democratic Senator Richard Blumenthal, a co-author of that law, called the waiver "a stain on our nation's character." Republican Representative Don Bacon said: "Propping up Russia's war economy is terrible."

What happens next

The license runs until 7 April 2027 unless the Treasury changes it. The first test is whether Russian diesel actually starts moving in October, as Novak said it could, and whether pump prices follow the futures market down before Americans vote on 3 November.