Why are oil traders refusing to buy Russian diesel after Trump-Putin deal?

At least three tankers carrying Russian diesel toward the United States have changed course. This matters because it shows that the Trump-Putin arrangement has not translated into actual deliveries. Nearly a month after the agreement, zero Russian diesel had reached the US, despite high diesel prices.

The tanker Talisman and the Sierra Leone-flagged Leruo left Primorsk with the US East Coast listed as their destination. By Thursday, one was heading toward Brazil and the other toward the Mediterranean. A third tanker changed its destination from New York to “for orders,” leaving its unloading point undecided. A fourth, Beast, was signalling “Atlantic.”

The rerouting reflects uncertainty over whether traders can legally handle the cargo. New Jersey’s governor urged ports and terminals to reject Russian fuel. Until the legal conflict is resolved, more ships may remain at sea, redirect cargoes, or avoid US ports entirely.

Trump and Putin agreed that Russia would make diesel available to US and global markets, reversing years of US policy. The arrangement mattered because Washington had banned Russian energy imports after Russia’s full-scale invasion of Ukraine in February 2022. It was presented as a response to shortages and rising US diesel prices.

Trump announced the agreement after a phone call with Putin on October 9. He said more than 300,000 tonnes would become available immediately. Another 500,000 tonnes would follow in November, then 1 million tonnes “immediately thereafter.” The agreement permitted sales, deliveries, unloading, and imports until April 7.

The deal’s practical effect remains limited. The White House and Kremlin did not disclose whether it was written down, what price buyers would pay, or which companies were involved. Treasury issued a temporary exemption, but Congress’s import ban remained in place, discouraging buyers.

Trump’s announced supply plan involved more than 1.8 million tonnes of Russian diesel. He described an immediate release of more than 300,000 tonnes, followed by 500,000 tonnes in November and another 1 million tonnes afterward. The figures sound large, but promised supply is not the same as delivered fuel.

A long-range product tanker can carry up to about 100,000 tonnes of diesel. Russia sent four tankers after the deal, but the article does not disclose their exact combined volume. Aarathi Krishnan said the first dispatched tanker equaled roughly two hours of US distillate consumption. That comparison shows how little one shipment could affect national supply.

The broader promise may also fail to provide relief if ships cannot unload in the US. Traders face legal uncertainty because Treasury’s exemption conflicts with Congress’s continuing ban. Thus, the effective supply could remain far below the headline total unless deliveries and payments become legally secure.

Economic operators fear Russian diesel because two legal signals point in different directions. The Treasury temporarily authorized transactions that would normally face sanctions, but Congress’s ban on Russian energy imports remains in force. That uncertainty can expose companies to lawsuits, penalties, blocked payments, or reputational damage.

The risk affects the entire chain. Banks may refuse payments or financing. Ports and terminals may reject vessels. Fuel distributors may avoid unloading or reselling the cargo. New Jersey Governor Mikie Sherrill told port and terminal operators to turn away Russian fuel and warned that profiting from illegal trade would bring harsh penalties.

The exemption therefore has not created a clear commercial safe path. The Treasury said it was complying with applicable laws, while Sherrill argued the administration lacked authority to override Congress. Until courts, lawmakers, or regulators clarify the conflict, companies may choose not to participate, leaving tankers redirected or cargoes unsold.

Economic sanctions are government restrictions on trade, payments, financing, shipping, or other business involving a country, company, or person. They are used to pressure governments without direct military action. A sanctioned oil shipment may therefore be physically ordinary but legally restricted at several points in its journey.

For example, a cargo can leave Russia with a US destination, yet a bank may refuse payment, a port may deny entry, or a distributor may fear penalties for receiving it. In this case, Treasury issued a temporary exemption for Russian diesel transactions. However, Congress’s ban on Russian energy imports remained in place, creating uncertainty about the exemption’s authority.

That conflict makes the cargo risky even before arrival. Companies must examine the shipment’s origin, owners, vessel, payment route, destination, and applicable rules. If any participant violates a sanction or import ban, others may face enforcement or commercial losses. The article shows why buyers prefer caution over a potentially profitable cargo.

The article identifies Brazil and the Mediterranean as possible destinations for tankers that stopped heading toward the United States. It also says Russia intended the diesel for US and global markets. That means diverted cargo could seek buyers elsewhere, although the article does not confirm a final sale or destination.

The Talisman was reported heading toward Brazil, while the Leruo was moving into the Mediterranean. A third tanker changed its destination from New York to “for orders,” leaving its unloading point open. In shipping, traders can redirect a cargo by issuing new voyage instructions and arranging a different buyer, port, and delivery contract.

A legal redirection is not simply a change on a tracking screen. The trader must check the new country’s import rules, sanctions, vessel ownership, payment channels, and customs documents. Because the article gives no confirmed alternative sale, it is unclear whether these ships found buyers or merely postponed delivery.

Diesel prices depend on whether refineries can turn crude into usable fuel, whether ships can move supplies between regions, and whether governments allow those supplies to cross borders. A shortage in any part of that system can raise prices. Political decisions can also remove a major supplier from a market, even when fuel exists elsewhere.

The article reports that US diesel prices topped $6 a gallon in September, nearly twice their pre-war levels. It links shortages partly to attacks on Russian energy facilities. Shipping also matters: tankers carry large volumes, but rerouting or losing access to ports delays supply. The Russian cargoes illustrate how transportation and law interact.

Treasury’s temporary exemption could permit some trade, but Congress’s ban still discourages US buyers. If fuel cannot legally enter, international supply cannot easily relieve US prices. The article does not provide a forecast, but continued uncertainty may keep shipments moving elsewhere and prices elevated.