US companies shunning Russian diesel as tanker carrying fuel idles off East Coast
USO•US companies are unlikely to import Russian diesel from a tanker idling off the East Coast, experts said, despite a temporary sanctions waiver. US diesel was $6.13 per gallon on Wednesday, up 63% from $3.76 before the US-Israeli war on Iran began.
1. Import hurdles
Experts said banks may refuse to finance Russian diesel deals because of legal uncertainty and sanctions risks. Importers would also need to blend the fuel to meet US heating oil specifications, while buyers could face reputational costs and congressional scrutiny.
2. Tanker and prices
The tanker carrying the first Russian diesel cargo for the US halted off the East Coast this week, and its operator said its destination had not been decided. Energy Secretary Chris Wright said the fuel could still supply global markets if it did not reach a US port. Diesel cost $6.13 per gallon on Wednesday, down 20 cents from the day the waiver was announced in October but 63% above its pre-war level of $3.76.
3. Political and legal risks
The temporary waiver allows Russia to export an initial 300,000 tons, or 2.25 million barrels, of diesel to US and global markets, followed by 500,000 tons in November and 1 million tons thereafter. Senators from both parties have objected, and New Jersey Governor Mikie Sherrill warned port officials and terminal operators against accepting the fuel. A Trump administration official said the waiver complied with applicable laws.
