US licenses Russian diesel imports as rising diesel prices push inflation higher
Diesel prices have been feeding into inflation, and MarketWatch says the next readings could show more of it. For carriers and fuel haulers that means surcharges stay high and margins stay thin into the back half of October. The one piece of news that could change the supply math is the Trump administration's decision to license imports of Russian diesel.
The Russian diesel license
The license lets Russian diesel back onto US docks, and it came paired with pressure on Ukraine to stop hitting Russian refineries. More barrels could ease rack diesel if the flow actually shows up, though it is too early to count on cents-per-gallon relief.
Russian Deputy PM Alexander Novak called the deal "a positive signal for our economy" at Russian Energy Week, tying it to higher Russian refining and extra budget taxes. That is Moscow reading its own books. For a US jobber the only thing that matters is whether this adds diesel to the balance.
Diesel and surcharges
Diesel has been one of the lines pushing inflation higher, which keeps fuel surcharges elevated across freight contracts. Carriers running index-based surcharges have been passing the cost through, and shippers have been eating it. Rob Port in the West Central Tribune called the administration's diesel moves "dumb diesel politics," which tells you the licensing decision is drawing fire from the right as well as the usual places.
If Russian barrels land in volume, diesel at the rack could soften and surcharge tables could follow a few weeks behind. That is an if, not a when.
Continental's biodiesel
Continental Refining is doubling biodiesel capacity at its Somerset, Kentucky complex, even after shutting the soybean crush unit at the site. The capacity add matters more for blenders in the region than for the national diesel balance, but every gallon of domestic biodiesel is a gallon that does not need importing. Watch whether the feedstock supply holds up now that the soybean unit is offline.
Ukraine strikes
Russian strikes on October 13 and 14 cut power to at least 600,000 Ukrainians, four days after the US diesel license, according to Zelenskyy. He counted 39 ballistic missiles and more than 120 drones hitting Kyiv and Kharkiv, damaging 26 power facilities and four oil and gas sites. The reason a US hauler should care is the quid pro quo: the license reportedly came with pressure on Ukraine to stop striking Russian refineries, and Ukraine's refinery strikes had been tightening global diesel all summer. Fewer strikes could mean more Russian output staying online.
What to watch
Whether Russian diesel volumes actually reach US terminals, and how fast. Whether Ukraine backs off refinery strikes. And the next inflation print, which could show how much diesel added to the number.