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Iran Conflict 2026
21JUN

OFAC opens US market to Russian diesel

3 min read
17:51UTC

The US Treasury licensed Russian diesel for American buyers until April 2027, on the day Trump and Putin spent an hour and a half on the phone.

ConflictAssessed
Key takeaway

Washington opened its market to Russian diesel while keeping Moscow's sovereign accounts frozen.

The US Treasury's Office of Foreign Assets Control (OFAC) issued General License (GL) 135 on 9 October, a blanket exemption from sanctions for one class of trade. It authorises the sale, delivery, offloading and importation of Russian-origin diesel, "including importation into the United States", until 7 April 2027⁠1. OFAC Director Bradley T. Smith signed it under the Treasury's existing Russia sanctions regulations.

It landed on the day Donald Trump and Vladimir Putin spoke by telephone for about an hour and a half. Reuters reported that the two leaders agreed Russian diesel supplies to American and world markets, and the Kremlin said Russia had "confirmed its readiness to supply oil and petroleum products to the American and global markets"⁠2.

GL 135 keeps one door shut. Paragraph (b) bars any debit to US-held accounts of the Bank of Russia, the Russian National Wealth Fund and the Russian Finance Ministry⁠3. In practice American buyers can pay Russian sellers, but nothing moves out of Moscow's blocked sovereign accounts.

The licence covers one product for six months. Washington's waiver for Russian crude has stayed lapsed since mid-June, so oil itself remains outside the licence. Kaja Kallas, the European Union (EU) foreign policy chief, wrote on X on 10 October: "This is not the time to ease pressure on Russia, and Europe won't." TASS, the Russian state news agency, relayed the post⁠4.

Deep Analysis

In plain English

The United States bans most trade with Russia. Its Treasury can make exceptions, called general licences, that allow one kind of deal for a set time. On 9 October the Treasury made such an exception for diesel, the fuel used by lorries, tractors and ships. American and other buyers can now buy Russian diesel until April 2027. The exception has a limit. Money cannot be taken out of Russia's government and central bank accounts that are frozen in the US. Europe's foreign policy chief said the EU will not copy the move.

Deep Analysis
Root Causes

The Graham Act set a 30-day clock on 18 September. By about 18 October The White House had to tariff the biggest buyers of Russian oil, India and China among them, or certify a waiver to Congress. A licence under the older Russia sanctions regulations (parts 587 and 589 of Title 31 of the US Code of Federal Regulations) lets Washington ease one product without touching that clock.

Moscow had a product to sell. Russia's producer export ban, first imposed on 8 July, had bottled diesel up at home, and Novak now says the domestic market is fully supplied. A sanctioned seller with surplus fuel needs a buyer whose dollar payments clear, and only an OFAC licence provides that.

The carve-out in paragraph (b) reflects the one asset Washington has kept frozen since 2022: Russia's sovereign reserves. Keeping those accounts shut preserves the bargaining chip for a settlement while trade reopens.

What could happen next?
  • Precedent

    Washington has shown it will license a single Russian fuel product without a ceasefire, which other sellers and buyers will test for crude.

    Short term · Assessed
  • Risk

    A US-EU split on Russian energy gives Moscow a market in one bloc while the other keeps its ban, weakening joint enforcement on tankers and insurers.

    Medium term · Reported
  • Consequence

    The 7 April 2027 expiry becomes a recurring bargaining date, as monthly rollovers of other OFAC licences already are.

    Medium term · Reported
First Reported In

Update #28 · US licenses Russian diesel and turns on Kyiv

US Treasury OFAC· 12 Oct 2026
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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.