Russian diesel tankers divert from US, clouding Trump deal

Two of the three tankers carrying Russian diesel to the United States have changed course, the Financial Times reported on Wednesday, Nov. 4. The diversions cast doubt on President Donald Trump's deal with Vladimir Putin to import Russian fuel, and they come as U.S. diesel supplies have fallen to their lowest level in about 20 years. "Two of the three Russian diesel cargoes bound for the U.S. have now diverted to other destinations," Kpler analyst Matt Smith told the newspaper, according to The Moscow Times.themoscowtimes.com+1

Where the tankers are going

On Monday, Nov. 2, the Leruo changed its destination signal to Brazil. The tanker is owned in Hong Kong, flies the Sierra Leone flag and is sanctioned by the U.K., EU and Canada. The Talisman, a 20-year-old Russian vessel under U.S., U.K. and EU sanctions, turned into the Mediterranean. It is now off Algeria and signaling "for orders," which suggests its cargo has no confirmed buyer or port.united24media.com+1

The Greek-owned Agioi Fanendes, which loaded about 40,000 metric tons of diesel at Primorsk, still appears to be heading for New York, but it is also signaling "for orders". Smith said it is "set to arrive in New York this weekend," but that "given the apparent hesitancy from U.S. buyers — due to regulatory, legislative and sanction issues — it wouldn't be too surprising if this tanker diverted away from the U.S. as well". A fourth sanctioned tanker, the Seychelles-owned Beast, loaded at Primorsk on Oct. 27 and is signaling "Atlantic".kyivpost.com+2

Legal pushback and tight supply

Officials disagree over whether the shipments are legal. New Jersey Governor Mikie Sherrill warned port and terminal operators that accepting Russian diesel "violates federal law and could carry serious civil and criminal consequences". Critics point to a conflict between the 2022 Ending Importation of Russian Oil Act and the Treasury's General License 135, which allows Russian-origin diesel imports until April 7, 2027. Senators Susan Collins and Thom Tillis have argued that the imports break the 2022 law. CNN reported that the Senate Foreign Relations Committee has told banks, port operators and companies involved in the deal to preserve documents ahead of oversight inquiries once Democrats take control of Congress in January.ground.news+2

Meanwhile, U.S. distillate stocks, which include diesel, fell by 3.6 million barrels to 99.3 million barrels. That is the lowest level since May 2003.seekingalpha.com

Background of the deal

Trump announced the arrangement on Oct. 9 after speaking with Putin. He promised more than 300,000 metric tons of Russian diesel right away, with more shipments to follow. Earlier reports found that the deal had done little to lower U.S. diesel prices, which instead edged up slightly. "Even before Congress being Democrat, it looks as if it is not so easy to reintegrate Russia into the broader economy. Not even when you have an administration that is trying to do it," said Jacob Meldgaard, CEO of tanker company Torm.newsukraine.rbc.ua+2