EU's Dombrovskis on diesel deal: Now is not the time to ease Russian sanctions
Valdis Dombrovskis, European Commissioner for Economy and Productivity discusses the implications of a potential U.S.–Russia diesel deal and cautions against easing sanctions during the ongoing war in Ukraine. He also highlights Europe's urgent need to strengthen regional defense capabilities to address security threats along NATO's eastern flank.
Energy analysts suggest US diesel imports from Russia won’t significantly affect fuel prices in the short term, citing Russia’s limited exporting capacity. Masha Kotkin of the Center for Strategic and International Studies stated, "The amount of diesel Russia can provide would be a drop in the bucket compared to global demand." US President Trump claimed on Truth Social that Russia would supply "over 300,000 Tons of Diesel Fuel to the American and Global Marketplace" in October, November, and December 2022.
A Treasury Department waiver permits the importation of Russian diesel into the US until April 7, 2027.
However, Russia's export ability is constrained. Rachel Ziemba, a senior adviser at Horizon Engage, told Platts, "Russia has modest excess volumes to send to the global market." The planned October and November shipments are comparable to recent exports, she added, with scaling up to December and Q1 requiring refinery repairs and an energy ceasefire, which would take months. Only around 100,000-150,000 barrels/day of diesel were exported in recent months, according to S&P Global Energy CERA analysts.
Legal hurdles also impede US imports of Russian diesel. Senator Jeanne Shaheen and six other lawmakers expressed concerns on Oct. 11, noting a 2022 ban on Russian energy imports. They claim Trump's actions contradict this law and lack congressional consultation or justification. Ellen Wald, president of Transversal Consulting, explained that legal imports require a presidential submission to Congress about Russia's agreement to withdraw forces from Ukraine and cease hostilities, followed by a 90-day extension.
Consequently, Russian diesel imports cannot legally enter the US market in October or November without congressional repeal or replacement of the statute. Wald stated, "This is another of President Trump’s attempts to jawbone prices down — more diesel in the global market will relieve the tension on global supplies even if it doesn’t reach the US market."
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- Russian diesel imports unlikely to ease US fuel prices hellenicshippingnews.com
- Political fallout from Trump’s Russian diesel deal overshadows price impact semafor.com
