Trump administration officials are privately encouraging U.S. firms to accept Russian diesel currently crossing the Atlantic, industry groups familiar with the conversations said, despite warnings that doing so could place them in significant legal and reputational jeopardy.
At least three vessels carrying Russian fuel left for the United States in mid-October in response to President Donald Trump’s Oct. 16 executive order waiving sanctions on Russian diesel. The ships are expected to arrive the week following the midterm elections, but it’s still not clear where the fuel is headed.
U.S. firms don’t want to take on the risks that would come with buying diesel from the Russians, in part because congressional Democrats say that Trump’s order violates sanctions laws, industry officials and energy analysts told The Washington Sun.
As the Russian ships approach the United States, the stage is set for a showdown between the private sector, the administration and Democrats. It represents a key test of the president’s unilateral authority with significant consequences for national foreign policy.
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“Moscow and Washington are still scrambling to find takers, but we wouldn’t be surprised if the cargoes ultimately head to Brazil,” Rapidan Energy Group said in a note to clients.
“They’re being very strongly encouraged by both Moscow and Washington to take these cargoes, including with steep discounts, but they’re encountering a wall of resistance based on reputation and legal risks,” one analyst said.
In response to a request for comment, the White House referred The Sun to the Treasury Department. A Treasury official told The Sun that the Office of Foreign Assets Control’s “general license is consistent with actions the agency has taken in the past. We are complying with applicable laws and regulations.”
Another analyst described the cargoes as having been “shopped” for weeks by their commercial owners, but still unable to get any bites from U.S. firms. Multiple sources confirmed that the diesel cargoes did not have a confirmed buyer when they were loaded onto the tankers.
Trump’s waiver came as a surprise to the oil and gas industry and left them with many still-unanswered questions about how anyone who touches the fuel can guarantee compliance with all sanctions laws, multiple industry officials said. The waiver came only three weeks after Trump signed into law a bipartisan bill that further strengthened sanctions against Russian officials and companies.
New Jersey Gov. Mikie Sherrill is reviewing options to push back against the potential arrival of a tanker carrying Russian diesel, as questions mount over the legality of the shipments.
The Malta-flagged Agioi Fanendes, carrying approximately 40,000 metric tons of ultra-low-sulfur diesel, was initially listed as going to the Port of New York and New Jersey, with an expected arrival on Nov. 7. That tanker’s destination in publicly available vessel tracking data has since changed to “for orders,” indicating its next port of call is unspecified.
“Make no mistake: Trump’s diesel deal with Putin is corrupt and illegal, and I am evaluating options to stop it from arriving at a port in New Jersey,” Sherrill told The Sun in a statement, accusing Trump of “lining Vladimir Putin’s pockets at the expense of American consumers and our democratic ally Ukraine.”
House and Senate Democrats have sent letters to ports, banks and energy companies warning them that transacting the Russian diesel cargoes could expose companies to criminal penalties. With Democrats potentially poised to take control of the House and possibly the Senate in next week’s midterm elections, those letters signal that buyers of the diesel could get ensnared in congressional investigations next year.
“Everyone is trying to run as far away from this as fast as they can. Nobody wants to touch it because they’re afraid of what’s going to happen in the next Congressional session,” one Wall Street trader said, citing conversations with top companies. “Nobody wants to get ensnared in a lengthy legal battle or what will be a series of investigations and this looks like a classic case of that.”
“The problem is legal and banking. The import is permitted by executive order, but the sanctions sit with Congress, so every counterparty is asking what happens if the politics shift after the cargo lands,” said James Noel-Beswick, an analyst for Sparta Commodities.
Sen. Richard Blumenthal (D-Connecticut), the ranking member on the Senate Permanent Subcommittee on Investigations, demanded in letters to the owners of the Agioi Fanendes and the PVT Azura, a second tanker whose destination was Norfolk, Virginia, that they reverse course rather than deliver Russian diesel to U.S. ports.
“Any company or individual thinking about purchasing Russian diesel should be aware that they’re committing a crime and that Congress is watching,” Blumenthal told The Sun in a statement. “Also, they may be held accountable by a future administration even if this one looks the other way.”
He called on the companies to disclose the sellers, purchasers, terminal operators and insurers involved in the transfer — as well as any direction provided by the Treasury Department.
While the tankers appear to be heading toward United States ports, multiple industry analysts and officials said that they expect they will likely change their final destinations to Brazil, which has purchased significant amounts of diesel from Russia since the U.S. imposed sanctions in 2022. On Oct. 27, the Russian embassy in South Africa posted that three diesel tankers are en route to the United States.
During a Wednesday television appearance, Energy Secretary Chris Wright described the diesel waiver as an effort to simultaneously get more diesel into the global market and encourage Russia to the negotiating table over the war in Ukraine.
Those geopolitical tensions are only compounding companies’ concerns. The reputational damage associated with buying Russian oil could make it hard to pass along the fuel once it is in the United States, because it may be seen as “dirty,” said one Department of Transportation official familiar with the industry.
“Of course, this would be blood money that would end up buying something to kill Ukrainians or fund other evil Russian operations around the world. If you can live with this, go ahead and pay them,” said Maryan Zablotskyy, a member of the Ukrainian parliament.
Liability for transacting on the Russian fuel could extend for years, well beyond the final years of the Trump administration, said Jeremy Paner, a sanctions compliance attorney, describing the possibility that a future president could investigate companies involved in any transaction of the diesel. “It’s not worth it,” he said.
“You have a lot of questions that are usually answered before a decision like that would be made,” one industry official said. “It kind of leaves the industry in a tough spot where you don’t really know what to make of something.”
Ukrainians feel “absolutely abused” by Trump’s decision to permit imported Russian diesel and hope American firms reject the deliveries, according to Oleg Ustenko, a former economic adviser to Ukraine President Volodymyr Zelenskyy. Ustenko said the decision was particularly hard to take at the same time that the U.S. tells the Ukrainians not to strike Russian oil refineries even as Russia continues to kill Ukrainian civilians.
“My understanding is we have people who have sympathy to us in American ports, as well as some people on the business side. Those in management may not be very happy to receive these shipments,” he said. “I would not be surprised if we see a kind of boycott from the side of the U.S. ports. If it happened, it would be an absolutely fantastic symbol for us.”
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