Trump's deal opens the way for Russian diesel to global markets

The US suspension of sanctions and Russia’s lifting of its diesel export ban made headlines last week. Now, however, the impact is showing up in the data. Russian shipments are returning to traditional markets. According to Reuters, citing shipping data from Kpler and LSEG, at least two tankers have headed to Turkey and Brazil in recent days.

Russia lifted its own diesel export ban on October 9. It had introduced the ban to address a domestic fuel shortage caused by Ukrainian drone attacks on refineries. The move followed a deal with US President Donald Trump aimed at restoring diesel supplies to global markets. The US has thus eased its sanctions on Russia for the umpteenth time in an effort to limit the impact of the conflict with Iran.

The deal included a temporary suspension of US sanctions on Russian fuel shipments. The EU and the United Kingdom will maintain their sanctions. Russian diesel exports have totalled around 345,000 barrels per day since the start of this year, a year-on-year decline of 41%, according to Kpler data.

Russia, usually one of the world’s largest diesel exporters after the United States, had already been limiting exports over the summer before imposing a complete export ban. The situation is now changing as Trump seeks to curb rising diesel prices ahead of the US midterm elections. Diesel is a key fuel for industry, agriculture and transport.

Return to global markets

According to Kpler data, tankers carrying Russian diesel are heading from the Baltic port of Primorsk to Brazil and Turkey. Each is carrying around 300,000 barrels. Morocco has also begun importing Russian diesel since the export ban was lifted. 

Trump said Russia would immediately export 300,000 tonnes of diesel, followed by another 500,000 tonnes in November and then one million tonnes. Russian Deputy Prime Minister Alexander Novak, however, suggested exports could be even higher. Russia aims to increase exports to as much as 3.5 million tonnes per month, or around 875,000 barrels per day, by the end of this year, he said.

The volumes announced so far are relatively small compared with the global shortage. Russia is likely to prioritise established markets that can quickly absorb large volumes of diesel rather than seek new buyers. According to Kpler, shipments of Russian diesel loaded onto tankers between October 11 and 20 totalled around 210,000 tonnes, or 1.56 million barrels.

Shipments to the US too

Media outlets have also reported that Russia will send its first tanker carrying diesel to the US today. The vessel is expected to carry 40,000 tonnes of fuel.

Russian President Vladimir Putin met US special envoy Steve Witkoff in St Petersburg on Wednesday. Witkoff thanked him for lifting the export restrictions. Putin said that global diesel prices had fallen by 5 to 6% since the deal was reached and announced that the first Russian tankers would set sail within two to three days. Russia is preparing several vessels to depart in succession, he said, and could also supply the US market with large volumes of fertiliser.