Moscow opens diesel tap: first 300,000 tons, license through April 2027

Three million tons. That is the deal's ceiling; the volume that can be reached monthly. The first tranche is much smaller: 300,000 tons for October, 500,000 for November, 1 million for December. The Russian government partially lifted its diesel export ban on October 10 and approved the first release of 300,000 tons. The U.S. Treasury issued the same day a temporary general license valid through April 7, 2027 for transactions in Russian-origin diesel. The arithmetic of the two capitals checks out.

Other news was on today's agenda — the airport attack in Riyadh, the fund debate in Istanbul — but a single story had to be chosen. I chose this one because diesel will be the world's most expensive liquid this winter: the same fuel burns everywhere, from truck drivers to farmers, from generators to heating; its price is not far from the bread on the table.

The mechanics of the deal seem simple; its politics do not. In the October 9 phone call, the two presidents discussed petroleum product supplies; according to the Kremlin statement, the resolution of the Ukraine conflict, economic cooperation, and the Iran issue were also addressed in the same call. The next day the Russian cabinet ordered companies to "immediately conclude contracts for diesel supplies with foreign counterparts in coordination with the government." Deputy Prime Minister Alexander Novak emphasized that domestic consumers would not be affected — a statement meant to reassure Russian drivers that they would not face queues; because the reason the ban was imposed was domestic shortages following refinery attacks.

How do you price a person's day? A truck filling up with diesel in Turkey depends on the European refinery margin. If the European refinery margin loosens with Russian diesel effectively returning to the market, this loosening will reach the Mediterranean basin within weeks, from there to Aliağa, and to pump prices. The reverse is also true: if the three million ton ceiling is only on paper — because the condition of Russian refineries was explicitly conditioned in Trump's statement, "volume and delivery schedule depend on the condition of refineries" — then pump prices won't ease, only expectations will be traded.

Here we should not tie two events together. Yesterday the airport attack in Riyadh created a risk premium in the Gulf; the return of Russian diesel operates in a different pool, affecting a different product. One inflates the geopolitical premium of crude oil, the other loosens the supply side of the refined product. That they emerged on the same day is coincidence; that they push the same price in the same direction is not necessary. These are separate stories, they just happen to sit at the same table.

Reading the U.S. Treasury's license requires special attention. The words "temporary" and "general" stand together: temporary because it expires on April 7, 2027; general because it permits Russian-origin diesel transactions collectively, not to a specific buyer. In practice this means that banks and insurers — the true guardians of the sanctions regime — will feel secure. Without a license, no major tanker would load Russian diesel; with the license, a six-month window opens.

Novak's schedule is ambitious: October 300,000, November 500,000, December 1 million tons — and after that up to 3 million tons monthly. This figure is close to Russia's peak export capacity; reaching it without repairing refinery damage is a difficult target. The Trump side must also know this; the clause "depending on the condition of refineries" means exactly that. Three million is not a ceiling, it is a carrot sitting in the middle of the negotiating table.

From a global market perspective, the place to watch is the diesel crack spread — the difference between crude oil price and diesel price. If the margin narrows, the deal is eroding in the market. If the margin continues to widen, it means Russian diesel is not flowing despite the license. We will learn something about this margin tomorrow; because the weekly EIA report first announces crude oil inventories, then product inventories.

Let's not miss one point: in the Kremlin's call notes, Ukraine, economics, and Iran appeared side by side. The diesel deal is the visible part of this three-part negotiation; the consideration for the other two has not yet been disclosed. Today's newspaper sees diesel, but there are other papers on the table.

**REGIONAL NOTES**

**Middle East** — The death toll from the Houthi ballistic missile attack on King Khalid International Airport in Riyadh yesterday has risen to 12, with 309 wounded; among the dead is a U.S. citizen. The Saudi-led coalition promised a "determined response," Trump said he would speak with Crown Prince Mohammed bin Salman. Riyadh schools switched to remote learning for a week — the second time in a month. The risk premium in the Gulf is being repriced.

**Eurasia** — Novak's schedule creates an internal balance question for Moscow: export ceilings of 300,000 tons in October, 500,000 in November, 1 million in December could strain the domestic market again. The reason the ban was imposed was the damage Ukrainian drones caused to refineries; opening exports before repairs are complete means pressure on pump prices. Novak's statement that "domestic consumers will not be affected" is an answer to this concern, not yet a guarantee.

**Europe** — After three years since 2023, when Europe effectively separated from Russian diesel, the U.S. Treasury's general license poses a difficult question for Brussels: will Washington issue a license while the EU maintains its own sanctions regime? If the European refinery margin loosens as Russian diesel begins to flow into the global pool, this loosening will be an indirect relief to pump prices on the continent but an uncomfortable relief politically.

**LEDGER** — **USD/TRY**

USD/TRY stands at 49.28 today; over the last four days it has moved in a narrow corridor between 49.26 and 49.34. The diesel deal and Riyadh tensions emerged on the same day, yet the exchange rate barely moved — the market reads the two headlines as mutually neutralizing.

**WORD FOR TOMORROW (12.10.2026)**

On Monday, October 12, the EIA weekly oil stock report should show U.S. crude inventories rising by at least 2 million barrels; if they don't rise or decline, it will be understood that the diesel deal has not convinced traders and the Hormuz premium is still working.