The first shipment of Russian diesel being sent to the United States is currently en route to New York under an unexpected agreement between Moscow and former U.S. President Donald Trump. This shipment, which includes 40,000 tons of ultra-low sulfur diesel, was loaded at the Russian Baltic port of Primorsk and is expected to arrive in the United States on November 7.
Details of the Agreement and Its Implications
The Trump administration announced this agreement as part of its efforts to reduce soaring diesel prices ahead of the November 3 midterm elections in the U.S. In this context, Trump has lifted some sections of the new sanctions law against Russia and warned European countries that if they do not release their emergency reserves, the United States may ban diesel exports to those countries.
Read more: Asian Stocks Decline with Drop in Technology Markets
This shipment is considered the first imported diesel to the United States since the announcement of a ban on Russian oil and petroleum products imports by current President Joe Biden in 2022. On October 9, Trump announced that Russia would quickly send 300,000 tons of diesel to the United States and global markets, followed by 500,000 tons in November and 1 million tons immediately thereafter.
Global Diesel Market Developments
Kremlin spokesman Dmitry Peskov confirmed on Friday that the first ship under this agreement has departed from Primorsk, but did not specify whether the ship is heading to the U.S. market or another destination. According to Peskov, there are reports from the Ministry of Energy indicating that the first ship is heading to its buyers and that more shipments will continue in the near future.
The recent agreement between the United States and Russia includes the lifting of Russia's self-imposed ban on diesel exports. Since the imposition of the European Union's complete sanctions on Russian oil product imports in February 2023 due to the war in Ukraine, Russia has primarily exported its diesel to Turkey, Brazil, and African countries.
Transport data released by LSEG and Kpler shows that Russian diesel shipments have returned to their traditional destinations, with at least two tankers heading to Turkey and Brazil. However, the destination of other tankers remains unclear, and the shipments loaded in Primorsk are heading towards Gibraltar, the Atlantic coast, or Port Said.
Alexander Novak, Russia's Deputy Prime Minister, has announced that more shipments to the United States will take place in the near future as companies from both countries are finalizing the necessary contracts. Additionally, Kirill Dmitriev, a representative of Vladimir Putin and head of Russia's National Wealth Fund, has stated that the U.S. Treasury has asked this fund to resolve the complex payment issues related to this agreement.
Novak also noted that Russia will be able to increase its diesel exports to normal levels of 3 to 3.5 million tons per month by the end of this year.
Read more: Impact of the Closure of the Strait of Hormuz on the Economies of Arab Gulf Countries · U.S. Government Indicates Proximity to Peace Agreement in Ukraine War
