Russia Sanctions Waiver and 1.8 Million Tonnes of Diesel Offset Only 2.4 Days of Hormuz Losses

President Donald Trump signed an executive order late on Friday, October 16, waiving nearly all provisions of the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026. The measures were due to take effect on October 18. The waiver follows a Treasury license, issued a week earlier, that opens the US market to Russian diesel.

Brent crude settled at $109.86 per barrel on Friday's ICE close, up $3.94 or 3.7% on the day, its highest settlement since May 19. West Texas Intermediate settled at $101.41 per barrel on the CME, up $3.44, according to FinanceFeeds, citing Reuters data. The administration says the waivers are meant to ease energy prices, which rose during the US-Israel war on Iran.

What the Executive Order Waives

According to ABC News, the order removes tariffs of up to 500% on Russian goods, including oil and gas. It also removes tariffs of up to 100% on the five largest buyers of Russian crude and gas. Sanctions on foreign banks dealing with Russian state banks are waived as well.

The order does not touch sanctions imposed earlier by executive order. The waivers last until the president or secretary of state decides further action is warranted. RFE/RL reports that critics noted the waivers carry no expiration date.

Criticism crossed party lines. Republican Senators Thom Tillis and John Cornyn objected, and Democratic Senator Chuck Schumer called the move a gift to Putin. White House spokesperson Taylor Rogers said the act gives the president added authority to pursue a peaceful resolution.

The Diesel Arithmetic

The Treasury's Office of Foreign Assets Control issued General License 135 on October 9. It authorizes the sale, delivery and import of Russian diesel, including into the United States, until April 7, 2027. Euromaidan Press summarizes the license terms.

Trump said Russia would supply 300,000 tonnes of diesel immediately, 500,000 tonnes in November and 1 million tonnes after that. Traders count barrels, so we converted at 7.45 barrels per tonne. That yields 2.24 million barrels, 3.73 million barrels and 7.45 million barrels, or 13.4 million barrels in total.

Set against the Strait of Hormuz, the total looks small. FinanceFeeds reports flows of 11.62 million barrels per day in the week to October 13, against a baseline of 17.15 million. The shortfall is 5.53 million barrels per day, so the full 1.8 million tonnes covers 2.4 days of lost flow.

Against US demand the pledge is also thin. Euromaidan Press cites US diesel use of 16 million tonnes a month, or 533,000 tonnes a day. The first two tranches, 800,000 tonnes, cover 1.5 days of American consumption.

Who Gains From the Tariff Waiver

The tariff provisions mattered most for Russia's crude buyers. Al Jazeera, citing the Centre for Research on Energy and Clean Air, reports that China bought €6 billion of Russian crude in September and India €3.6 billion. Hungary and Slovakia together bought €290 million.

Vasily Astrov of the Vienna Institute for International Economic Studies estimates that 60 cents of each extra dollar per barrel of Russian oil reaches state coffers. Importers in China and India no longer face the threat of 100% US tariffs.

Europe remains exposed on gas. Al Jazeera cites CREA figures of €817 million in pipeline gas and €615 million in LNG imported by the EU from Russia in September. Urgewald counts more than 12 million tonnes of Russian Arctic LNG at EU ports from January to September, up 9.5% year on year.

What Changed Since Our October 1 Coverage

On October 1, our report on China's fuel export halt noted Russia had extended its own diesel export ban across all producers through October 31. Brent settled at $102.70 per barrel that day. The ban removed distillate from European and Asian markets.

Brent has since gained $7.16, or 7.0%, to $109.86. Washington has moved from tightening to loosening on Russian barrels, while Moscow's export ban remains in force. EU economy chief Valdis Dombrovskis told Al Jazeera the pledged volumes are too small to matter macroeconomically and doubted Russia could supply them.

The White House and the EU therefore disagree on whether the diesel deal can move prices. Our conversion supports the EU view on scale. Even at full delivery, the volumes equal 2.4 days of Hormuz losses, and the IEA emergency release remains the larger diesel measure.