Washington: The US on Friday lifted sanctions on the sale of Russian diesel till April 7 next year.
The announcement by the US Department of Treasury came minutes after US President Donald Trump spoke with Russian President Vladimir Putin and struck a deal to supply diesel to the American and global markets.
“…all transactions prohibited by the Russian Harmful Foreign Activities Sanctions Regulations … that are related to the sale, delivery, offloading, or importation, including importation into the United States, of diesel fuel of Russian Federation origin are authorised through 12:01 a.m. Eastern Daylight Time, April 7, 2027,” the Treasury Department said.
Diesel prices, used for agriculture, heating homes and trucking, are near a record and risk for Trump’s fellow Republicans ahead of the November 3 congressional elections that will determine whether they maintain thin control of Congress. Diesel prices fell after the announcement, but analysts said the deal may not be enough to keep them down.
Trump said on social media he had a “highly successful” discussion with President Vladimir Putin in which they agreed that Russia will immediately supply more than 300,000 metric tons of diesel to US and global markets, equal to about 2.25 million barrels of fuel. The US exports about 1.5 million barrels of diesel per day.
After the call, an envoy for Putin, Kirill Dmitriev, praised cooperation between Russia and the US in a post on X. Dmitriev asked US officials during his visit to Washington last month for licenses to export diesel to the US market to be granted to all Russian major oil firms, sources familiar with the situation said.
In October 2025, the US imposed sanctions on Russian oil companies over Moscow’s war that began in 2022. The diesel exports could provide Moscow with billions of dollars in revenues that could help Putin continue the war with Ukraine.
Ukrainian President Volodymyr Zelenskiy criticized the deal, announced while a Ukrainian delegation was in the US to discuss how to seek a resolution of the war, as a “weak decision on the part of strong partners.”
“Gifts to Putin will not bring peace or any benefit to the civilized world. Russia will ‘repay’ the diesel with further terror and perfidy,” he said on X.
The deal was also criticized by US lawmakers, including Trump’s fellow Republican, Representative Don Bacon, who said it is time to apply more sanctions that Congress passed recently, not lift the measures.
“Now is the time to use those sanctions to squeeze Putin’s war machine, not reward a dictator by putting more money in his hands while he continues targeting and killing Ukrainian civilians,” Bacon said on X.
The US Treasury Department issued a license allowing importation of Russian diesel until April 7.
Trump said Russia would supply another 500,000 tons in November and a further 1 million tons “immediately thereafter.” Even more would follow, Trump said, “based on the condition of their diesel refineries,” which have been damaged by Ukrainian attacks.
Analysts said the agreement was unlikely to lead to sustained lower fuel prices. “I cannot overstate how much of a nothing burger this is,” Rory Johnston, an oil market researcher and founder of CommodityContext.com, said on X, adding that Russia usually exports much more diesel than the volumes in the deal when its refinery fleet is not under attack.
“It’s clearly not a fix, but another stream to aid a very tight diesel market,” said Jim Mitchell, an analyst at consultancy Wood Mackenzie.
Diesel prices, which are often a big driver of inflation, are up 70% since the US and Israel launched the war with Iran on February 28. The wars in Iran and Ukraine have triggered a severe global fuel supply crunch, pushing average US diesel prices to $6.28 a gallon on Thursday, according to the AAA motorist group.
Prices have stayed high despite two recent moves by Trump to boost supplies of the fuel: pressuring allies to release emergency reserves and expanding access to tax-exempt red-dyed diesel, which is normally used for farm equipment.
US diesel futures fell almost 5% following news of the deal and were trading at $4.64 a gallon.
“Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority,” Trump said.
Defence Production Act
Three industry sources said earlier on Friday that Trump will issue a directive in the coming days to some US department heads to find ways to control diesel prices.
The directive, which they said could take the form of a presidential memo, will push officials to find ways to bypass local and state regulations blocking energy production and use the Cold War-era Defense Production Act to increase output of oil and fuel.
Under the DPA, the president can authorize US-backed loans or loan guarantees to expand domestic manufacturing of critical materials and to require companies to prioritize government contracts for essential goods.
The White House has been weighing how to use the DPA to expand refining capacity as the war with Iran exposes US vulnerability to supply disruptions and price spikes.
Refining executives told administration officials last month that federal money would be better directed toward making refineries more efficient or expanding plants rather than financing a new refinery, which would be more costly and take years to complete.
Reporting by Bo Erickson, Timothy Gardner, Jarrett Renshaw; additional reporting by Jonathan Landay, Susan Heavey, Doina Chiacu in Washington, Nicole Jao in New York and Gleb Bryanski in Moscow; writing by Timothy Gardner; Editing by Ismail Shakil, Jonathan Spicer, Rod Nickel and David Gregorio
