Why are oil traders refusing to buy Russian diesel after Trump-Putin deal?
At least three tankers carrying Russian diesel to the United States have changed course, casting doubt over US President Donald Trump's October deal with his Russian counterpart Vladimir Putin.
Nearly a month after Trump agreed to let Russia release diesel stocks to the US and global markets, despite existing sanctions, zero diesel has reached the US, where prices have nearly doubled since the start of the US-Israel war on Iran. Russia has sent out a total of four tankers loaded with diesel since the deal was agreed.
The Russian tanker Talisman and the Sierra Leone-flagged Leruo left the Baltic port of Primorsk last month, with the US East Coast as their declared destination. As of Thursday, however, one was heading towards Brazil and the other into the Mediterranean, according to marine analytics firm Kpler and the vessel-tracking site MarineTraffic.
A third tanker, still in the North Atlantic, has changed its destination from New York to "for orders", leaving its unloading point open. The Financial Times also reported that Beast, a sanctioned Seychelles-owned tanker that was loaded at the Russian port of Primorsk in late October, has set sail towards the US and is currently signalling "Atlantic".
The Trump-Putin Agreement
Trump first announced the agreement following a call with Putin on October 9. He said Russia would make more than 300,000 tonnes of diesel available immediately to US and global markets. Long-range product tankers, which carry diesel supplies, can carry up to about 100,000 tonnes of diesel at a time.
Another 500,000 tonnes would follow in November, then 1 million tonnes "immediately thereafter", Trump wrote on his Truth Social platform. The agreement allows Russian diesel to be sold, delivered, unloaded and imported until April 7, reversing years of US policy after Washington banned imports of Russian energy following Moscow's full-scale invasion of Ukraine in February 2022.
Legal Risks and Resistance
Despite the US Treasury temporarily authorizing Russian diesel sales that would normally fall under sanctions, Congress's ban on Russian energy imports remains in place, leaving a high level of uncertainty for traders. New Jersey Governor Mikie Sherrill wrote to port and terminal operators in her state on Monday, telling them to turn away ships carrying the fuel.
She warned that "any effort to profit from the illegal trade in Russian fuel will be met with harsh penalties." Sherrill argued the Trump administration had no authority to override the ban. Lawmakers have also warned banks, port authorities and fuel distributors that handling the imports could expose them to civil or criminal liability, as well as future congressional investigations.
It's clear there's hesitancy here in bringing these barrels onshore just because of the implications of doing so.
Where Will the Diesel Go?
The first two diverted tankers are heading towards Brazil and the Mediterranean, according to Kpler data, and the third tanker could follow. "Because of regulatory [and] sanctions concerns, we may not see this cargo discharge on the US Atlantic coast," Smith told AP.
Moscow, however, insists the deal is on track. Kremlin spokesman Dmitry Peskov said "all the diesel will find its buyers." Putin's special envoy, Kirill Dmitriev, went further, writing on X that the reports were "fake" and "tankers destined for the US continue on course."
US retail diesel prices topped $6 a gallon ($1.59 per litre) in September – nearly twice their pre-war levels – and have remained elevated. The Trump administration claims the exemption is lawful, and no court has ruled on the dispute.
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