Russian diesel sanctions ease under OFAC GL 135. Damaged refineries limit supply

General License 135 lets US buyers deal in Russian diesel until 7 April 2027, and Moscow says it is lifting its export ban early. Trump's 4.8 million tonnes is almost two normal months of exports. The 4.0 million tonnes after November have no date.

Treasury has signed a licence allowing US buyers to deal in Russian diesel, and Moscow says it is ready to sell. Deliveries now depend on Russia's damaged refineries.

The sanctions barrier is gone until 7 April 2027, and Russia says its own export ban is ending early. Refinery capacity is now the limit. Russia can probably spare the first batches Trump announced. It cannot make the large undated ones.

What the licence permits

The licence is Treasury's General License 135, signed on 9 October by its Office of Foreign Assets Control (OFAC). It permits "the sale, delivery, offloading, or importation, including importation into the United States, of diesel fuel of Russian Federation origin".

The permission ends at 12:01 a.m. eastern time on 7 April 2027. That is 180 days after signing. The licence sets no volume cap and names no company.

The licence has one exclusion. The licence text bars any debit to a US bank account of three Russian state bodies. They are the central bank, the National Wealth Fund and the Ministry of Finance. In plain terms, the licence does not unlock their US accounts.

Trump announced the volumes in a social media post. AP reported that it promised more than 300,000 tons of diesel "immediately" and 500,000 more in November. The post adds 1 million tons "immediately thereafter" and 3 million "within a short period of time". Trump's tons are read here as metric tonnes.

Each promised batch is a tranche, or one instalment of the total. The first two tranches come to 0.8 million tonnes. The last two come to 4.0 million tonnes, and they have no date. All four together make 4.8 million tonnes.

Putin's statement, released by the Kremlin, says Russia "confirmed its readiness to supply oil and oil products to the American and global markets". Moscow has not confirmed Trump's volumes.

Deputy Prime Minister Alexander Novak went further. He told the state news agency Tass that Russia is "immediately starting to lift restrictions on diesel exports ahead of schedule". He said supplies to the United States could start already in October. He also said the domestic market will be "fully supplied".

Russia's export ban had also blocked sales. The government said on 30 September that it had extended the ban on diesel exports by fuel producers until the end of October. The late August extension allowed supplies under intergovernmental agreements, meaning deals between governments. Examples were former Soviet republics and Mongolia. The US licence removes the buyer's sanctions risk. It does not override Moscow's ban on producers exporting diesel. Novak says that restriction is now being lifted.

How much refineries can supply

Refineries are the harder limit. Reuters reported that half of the six top diesel producing refineries cut output sharply or halted it in September after drone strikes. Kirishi was fully shut. Volgograd and NORSI ran at about a quarter.

The International Energy Agency says Russian diesel output has fallen by about 30%. Exports were under 1 million tonnes in June, by traders' estimates. That was before restrictions began in July. A year earlier they ran at about 2.5 million tonnes a month.

A normal Russian export month is about 2.5 million tonnes. The four tranches total 4.8 million. That equals 1.9 months of exports.

The first two tranches total 0.8 million tonnes, about a third of a normal month. Spread over roughly two months, they sit below even the depressed June pace. Turkey and Brazil had been the largest buyers, taking at least half of cargoes before the July restrictions. Those barrels could be redirected once the ban lifts.

Most of the promised fuel has no delivery date. The last two tranches total 4.0 million tonnes, or about 1.6 normal months of exports. They would have to come from refineries that drones have cut.

What it means for US prices

The full package comes to about 36 million barrels. That is an estimate at 7.46 barrels per tonne.

The Energy Information Administration puts July US distillate use at 3.685 million barrels a day. Distillate means diesel and heating oil. The package is about 9.7 days of national consumption. The first 300,000 tonnes would cover about six tenths of one day. Even complete delivery would barely dent the pump price unless it shifts global bids for diesel.

The US diesel average is $6.28 a gallon, according to AAA, the motorists' association, after a record $6.52 on 22 September. Trump's post called lower prices for "Great Farmers, Ranchers, and Truckers" his "Greatest Priority". Ukrainian President Volodymyr Zelenskyy called the deal "a weak decision by strong partners".

What remains unconfirmed

The White House did not say who would pay for the fuel. It did not clarify whether the November supply would arrive before Election Day on 3 November. AP also described the licence as covering diesel already loaded onto tankers as of Friday. The licence text carries no such condition. The US has imported no Russian oil or gas since 2022, according to the Energy Information Administration, as AP reports.

AP reports this is the first Treasury easing on diesel to run longer than the standard 30 day window since the Ukraine war began. The fixed end date lets an importer plan a voyage whatever happens to the refineries. The sanctions discount on Russian cargoes may narrow now that the legal risk is lifted. That helps a buyer's margin before it helps a driver.

Moscow now says it is lifting the producer ban ahead of schedule. The first 0.8 million tonnes can come from a stretched system, because that is about a third of a normal month of exports. The 4.0 million tonnes after November cannot come from refineries that drones have cut.

By the 3 November election the licence will have covered a few cargoes at most. The larger promise will still be a promise.