Written by: Islam Al-Saqqa
At least three tankers carrying Russian diesel destined for the United States have changed course, casting doubt on an agreement reached by US President Donald Trump with his Russian counterpart Vladimir Putin last October. Nearly a month after the agreement, no diesel shipments have arrived at American ports, as prices have nearly doubled since the start of the American-Israeli war on Iran.
What happened to the tankers carrying Russian diesel?
The Russian tanker "Talisman" and the "Lerio," which flies the Sierra Leone flag, left the port of Primorsk on the Baltic Sea last month, with their declared destination being the East Coast of the United States. However, as of Thursday, one was heading towards Brazil and the other towards the Mediterranean, according to data from maritime analytics firm "Kpler" and the ship tracking website "Marine Traffic." A third tanker still in the North Atlantic also changed its destination from New York to "for orders," leaving the discharge point open. A report by the "Financial Times" stated that the Seychelles-owned and sanctioned tanker "Beast," which was loaded at the Russian port of Primorsk in late October, sailed towards the United States and is currently indicating "Atlantic Ocean."
What did Trump and Putin agree on?
Trump announced the agreement following a call with Putin on October 9, stating that Russia would immediately provide more than 300,000 tons of diesel to American and global markets, followed by 500,000 tons in November, and then one million tons "immediately thereafter." The agreement allows for the sale, delivery, discharge, and import of Russian diesel until April 7. The agreement came after Trump blamed Ukraine for the diesel shortage by targeting Russian energy facilities, reversing years of American policy that banned Russian energy imports following the full-scale invasion of Ukraine in February 2022. The Office of Foreign Assets Control (OFAC) at the US Treasury Department issued a temporary sanctions waiver, which angered a bipartisan group in the US Congress that passed a new sanctions package in September named after the late Senator Lindsey Graham. The Treasury Department told "Associated Press" that the waiver "is consistent with all applicable laws."
Expected amounts of Russian diesel
The volume of shipments remains unclear, but analysts say the first shipment will not provide meaningful relief to American consumers. Retail diesel prices in the United States exceeded $6 per gallon ($1.59 per liter) in September, nearly double pre-war levels, and remained high. Arathi Krishnan, CEO of "Raksha Intelligence," told Al Jazeera that the reported shipment is equivalent to approximately two hours of US distillate consumption, and even if it arrives as planned, it will make a negligible difference in the national supply.
Why are traders refraining from buying?
The reason is legal risks. Although the US Treasury has temporarily authorized sales of Russian diesel that usually fall under sanctions, the Congressional ban on Russian energy imports remains in effect, creating a high level of uncertainty for traders. New Jersey Governor Mickey Cheril wrote to port and terminal operators in her state on Monday, demanding they refuse ships carrying the fuel, warning that "any attempt to profit from the illicit trade in Russian fuel will be met with harsh sanctions." Legislators also warned banks, port authorities, and fuel distributors that dealing with these imports could expose them to civil or criminal liability, in addition to future congressional investigations. The Trump administration maintains that the waiver is legal, and no court has ruled on the dispute. Matt Smith, an analyst at "Kpler," told "Associated Press": "There is clearly a hesitation to bring these barrels to shore because of the repercussions of doing so."
Where will the diesel go now?
Experts believe the diesel is unlikely to head to the United States. The first two tankers are heading towards Brazil and the Mediterranean, according to "Kpler" data, and the third tanker may follow suit. Smith told "Associated Press": "Due to regulatory concerns and sanctions, we may not see this shipment being discharged on the US Atlantic coast." In contrast, Moscow insists that the agreement is on track. Kremlin spokesperson Dmitry Peskov said "all the diesel will find buyers." Putin's special envoy, Kirill Dmitriev, went even further, writing on the "X" platform that reports are "fabricated" and that "the tankers heading to the United States are continuing their course."
