The Trump administration is weighing looser sanctions on shadow fleet tankers that have hauled oil from Russia, Iran, and Venezuela, a US official said on 14 October, Reuters reported. An industry research group expects the change to do little for freight rates.

With Reuters calling high fuel prices a risk for Trump before the 3 November midterms, Washington has already eased sanctions on Russian oil and diesel this year and is now looking at the ships blacklisted for hauling sanctioned cargoes. In March, Treasury Secretary Scott Bessent said a waiver on Russian oil at sea would bring Moscow no significant financial benefit, yet Russia’s seaborne oil income jumped by $890 million in the week to 15 March, Bloomberg data showed.

“Legal oil” on blacklisted ships

The talks center on letting “legal oil” sail on previously sanctioned vessels, the official said. Only crude or fuel free of US sanctions would qualify, not Russian or Iranian oil. Washington wants more crude and refined products moving out of the Gulf, the official added. Companies would need US Treasury approval to use the ships.

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Research group Energy Aspects said US Energy Secretary Chris Wright, in a video to the World Petroleum Congress in Riyadh, tied the easing to record freight rates. Those rates hit records after the Iran and Ukraine wars drove up inflation and left US crude too costly for Asian refiners, Reuters said. Energy Aspects itself expects the easing to do little for freight rates, since most tankers sanctioned over Russian or Venezuelan links have kept trading for the past three months.

The Energy Department said any relief would do nothing to help Russia ship its oil or refined products. Treasury referred questions to the Energy Department. Yet Reuters noted that both departments could face pressure to let these vessels carry Russian diesel, given Trump’s push to get it onto world markets fast.

Britain is pushing the other way. UK finance minister John Healey urged counterparts at International Monetary Fund meetings in Bangkok on 15 October to keep tough sanctions on Russia, “especially a tighter ban on shipping services” that keep Putin’s shadow fleet operating.

Diesel license criticism and an unconfirmed ceasefire

On 9 October, the US Treasury issued a license clearing Russian-origin diesel trade until 7 April 2027. Ukrainian President Volodymyr Zelenskyy told reporters it was a weak decision unworthy of Ukraine’s partners. Democratic Senators Jeanne Shaheen, Chuck Schumer, and Elizabeth Warren called it a “total betrayal of Ukraine.” Republican Senator Thom Tillis said there is “a legitimate case for saying the president’s not following the law.”

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Trump then pressed Kyiv to spare Russian refineries and declared an “energy ceasefire” on 11 October. A White House official told Axios it covers only oil refineries. Neither side confirmed a similar announcement Trump made in mid-September, AAP reported.

Kremlin spokesperson Dmitry Peskov told reporters on 13 October that contacts on the ceasefire were continuing and referred further questions to Trump, Russian newspaper Vedomosti reported. He claimed the diesel deal was “a very mutually beneficial item of Russian-American cooperation” that serves the interests of Russia, the US, and world energy markets, Russian newspaper Kommersant reported.

Washington has put its sanctions on Russian diesel on hold. The US Treasury has authorized the sale, delivery, offloading, and import of Russian-origin diesel fuel, effectively suspending sanctions on that trade until 7 April 2027, the Office of Foreign Assets Control (OFAC) said on its website on 9 October.

The waiver lets Russian diesel back onto world markets and, Ukraine argues, hands Moscow fresh revenue for its war, which has killed more than 80 Ukrainian civilians in two days. Until now, it was unclear whether Washington would roll back the sanctions it imposed on Russia in 2022.

OFAC has issued the measure as General License 135, signed by the office’s director, Bradley Smith, according to the report. It authorizes transactions in Russian-origin diesel that sanctions would otherwise block.

The license sets one limit. It does not permit any debits from accounts at US financial institutions held by Russia’s central bank, its National Wealth Fund, or its finance ministry, the document says.

Trump’s promise of cheaper fuel

On 9 October, US President Donald Trump wrote on Truth Social that Russia would immediately supply more than 300,000 tons of diesel, then 500,000 tons in November, and another million tons right after.

Moscow would later send the US up to 3 million more tons, depending on the state of Russia’s refineries, Trump added, framing the deal as a way to bring down energy prices.

Why the volumes fall short

Analysts say the amounts are too small to move prices much. Together, the first tranches would cover about a day and a half of US demand, while US diesel use alone runs near 16 million tons a month. Experts read the move as politics ahead of an election rather than a real shift in the market, pointing out that Trump cited volumes in tons, which look larger than the barrels traders track.

The deal drew fury in Kyiv, and President Volodymyr Zelenskyy called it a weak decision by strong partners. The EU is moving the other way, with ambassadors approving the bloc’s largest sanctions package against Russia’s war machine, due for final adoption on 12 October.