NYMEX ULSD crack weakens after Trump announces additional diesel supplies from Russia

The front-month ultra low sulfur diesel crack against WTI crude fell on October 9 as US President Donald Trump announced additional diesel supplies from Russia. The crack dropped $6.45 per barrel to $96.80 per barrel. President Trump claimed that Russia would supply over 300,000 tons of diesel fuel to the American and global market immediately, another 500,000 tons in November, and 1 million tons afterward.

The US Treasury Department issued a sanctions waiver on October 9, allowing the sale, delivery, and importation of Russian diesel fuel into the US until April 7, 2027. Russian President Vladimir Putin stated that he was convinced this would have a positive impact on the global economy. However, the Russian government did not confirm the specific volumes mentioned by Trump, nor did it provide delivery schedules for individual petroleum products.

At the end of September, nearly half of Russia's refining capacity remained offline due to Ukrainian drone attacks. Russia has maintained a diesel export ban since July, which has prevented exports from recovering to pre-crisis levels by the end of the year. Russian diesel and gasoil seaborne exports increased in the week to October 1, marking the fourth-largest weekly loading since Russia imposed its full ban on diesel and gasoil exports in July.