US Temporarily Lifts Russian Diesel Sanctions Amid Surging Global Prices

In a sudden move that could shake up global energy markets, the United States has temporarily lifted its sanctions on the sale of Russian diesel until April 7, 2027. This decision, announced by the US Treasury's Office of Foreign Assets Control (OFAC) via General License 135, came minutes after a call between US President Donald Trump and Russian President Vladimir Putin. The aim is to boost global supply and bring down soaring diesel prices, which have hit record highs in recent weeks. This policy shift walks back earlier US restrictions and comes amidst a tight global diesel market, squeezed by ongoing geopolitical events like the Iran war and Ukrainian drone strikes on Russian refineries that led to Russia's own export ban. While the US is easing its stance, the European Union and the UK's bans on Russian refined products, along with the G7's $100 per barrel price cap, remain fully in force. President Trump cited the deal, alongside 'total control' of the Strait of Hormuz, as crucial to rapidly lowering diesel prices for consumers ahead of the November midterm elections. The agreement sees Russia committing to supply millions of tons of diesel to global markets, starting with an immediate injection of 300,000 tons. However, this move has drawn criticism from Ukrainian President Volodymyr Zelenskyy, who fears it grants Moscow more resources without concessions. Analysts are also questioning the long-term impact on prices, given the relatively modest volume compared to global demand and the existing damage to Russian refineries, indicating this might be a short-term political play rather than a lasting market fix.