Donald Trump’s plan to import Russian diesel appears to be encountering difficulties, as two tankers initially headed to the United States have altered their destinations. The arrangement, announced on October 9th, would have made over 300,000 metric tonnes of diesel available to US and global markets, but has drawn criticism from lawmakers and raised legal concerns.
State and federal officials have warned that handling any Russian diesel shipments could lead to legal repercussions. New Jersey Governor Mikie Sherrill advised port and terminal operators in her state to reject the fuel, arguing the Trump administration lacks the authority to override a Congressional import ban enacted over four years ago. A bipartisan group of senators has urged Trump to negate the deal, warning that it would provide a financial lifeline to President Vladimir Putin. Major banks, port authorities, and fuel distributors have also been warned about potential civil or criminal liability.
Two tankers that departed from the Baltic port of Primorsk last month originally declared US East Coast destinations. Marine data from Kpler and MarineTraffic.com shows both vessels have since changed course toward Brazil and the Mediterranean. A third vessel, while still in the North Atlantic, shifted its destination from New York to “for orders.”
Analysts have suggested that the imports are unlikely to significantly reduce US diesel prices, which have been elevated. The Treasury Department issued a statement affirming the lawfulness of its authorization.
Our reading is that Trump’s plan to import Russian diesel is facing practical difficulties, as evidenced by tankers diverting their destinations. This suggests that despite the administration’s stated intentions and legal affirmations, external pressures, from legal warnings, bipartisan opposition, and financial institutions, are creating obstacles to the deal’s implementation. The shift in tanker routes indicates a lack of confidence in the viability of the arrangement, even before the specifics of pricing and agreements are known.
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