Russian Diesel Tankers Head to U.S. Amidst Legal Showdown Over Trump-Brokered Deal

Three tankers carrying Russian diesel are currently crossing the Atlantic Ocean and are expected to arrive at U.S. ports, with a fourth vessel scheduled to depart soon. This development comes as President Donald Trump's agreement with Moscow to allow these fuel imports faces opposition in Congress and potential investigations into the involved companies.

According to a former Treasury Department sanctions official, Trump possesses the legal authority to permit these imports despite a 2022 law that bans Russian energy products. This is because the authorization granted does not eliminate the existing prohibition. Jeremy Paner, a partner at Hughes Hubbard & Reed, stated that the concern about the president violating the 2022 law is not legally founded and that the president has the authority to authorize such imports.

Russian Deputy Prime Minister Alexander Novak confirmed the tanker movements, noting that a fourth vessel was slated to depart Russia on October 28. The three current shipments, totaling approximately 140,000 metric tons, are the first authorized cargoes under an agreement made on October 9 between Trump and Russian President Vladimir Putin. This deal temporarily permits the import of Russian diesel, which the administration pursued to alleviate fuel prices amid supply disruptions linked to the war in Ukraine and Ukrainian strikes on Russian refineries.

The agreement has drawn criticism on Capitol Hill, where lawmakers argue that the administration lacks the authority to bypass the "Ending Importation of Russian Oil Act of 2022" without congressional approval. Senator Richard Blumenthal, D-Conn., has escalated this opposition by demanding that two shipping companies recall tankers carrying Russian diesel bound for U.S. ports. In letters to Eastern Mediterranean Maritime Limited and PetroVietnam, Blumenthal contended that the Treasury Department's General License No. 135 cannot override the 2022 import ban and warned that these deliveries would contravene federal law. He also requested detailed information about the companies involved and any federal guidance they received by October 31.

Paner clarified that Trump's action authorized specific transactions rather than lifting the underlying prohibition on Russian diesel imports. He explained that a license permits an action but does not remove the prohibition itself. The incoming tankers have attracted particular attention as at least two are reportedly subject to Western sanctions. The first tanker, the Agioi Fanendes, carrying about 40,000 metric tons of diesel, is signaling New York as its destination with an estimated arrival date of November 7. A second vessel, the Talisman, expected to reach the East Coast on November 9, is sanctioned by the U.S., the United Kingdom, and the European Union. The third tanker, the Leruo, is projected to arrive on the East Coast around November 11 and has faced sanctions from the EU, UK, and Canada due to alleged deceptive shipping practices involving Russian oil and petroleum products, including ship-to-ship transfers at sea.

Paner indicated that the U.S. authorization would permit these shipments to proceed under American sanctions regulations, even if a vessel is individually designated under U.S. sanctions. He noted that the breadth of the authorization issued by the Treasury Department's Office of Foreign Assets Control (OFAC) would encompass any issues related to Russian sanctions, making the U.S. sanctions status of one of the vessels irrelevant from a U.S. legal standpoint. However, he cautioned that this U.S. authorization would not automatically protect foreign companies operating under other countries' sanctions regimes. The complexity arises from potential involvement of European operators, insurers, and banks, for whom the U.S. authorization would not grant permission to participate in these shipments. Paner suggested that the use of sanctioned vessels might be a consequence of reputational and legal risks faced by global logistics and shipping companies, even when shipments are permitted by the U.S.

The arrival of these shipments highlights a shift in Washington's stance on Russian energy restrictions, which were initially imposed following Russia's 2022 invasion of Ukraine. At that time, the U.S. banned Russian petroleum imports and implemented price caps on Russian oil and refined products. Under the current deal, Washington authorized certain Russian diesel imports in exchange for Russia releasing a specified volume of diesel to global markets, with increases planned for November and subsequent months. Novak criticized lawmakers opposing the arrangement, asserting that their actions were contrary to the interests of American consumers. Additionally, in an October letter to commercial banks, fuel distributors, and port authorities in New York, New Jersey, and along the Texas Gulf Coast, lawmakers warned that companies involved in the diesel shipments could face investigations and demanded the preservation of relevant transaction records.