On 9 October, the US issued a temporary licence for certain transactions involving diesel fuel of Russian origin, and President Volodymyr Zelenskyy criticised this decision. In his view, easing the economic pressure on Moscow allows it to continue the war against Ukraine.
Briefly about the main points
- OFAC has authorised certain transactions involving Russian diesel until 7 April 2027.
- The licence does not lift the entire US sanctions regime against Russia.
- Trump announced a plan to supply up to 4.8 million tonnes of diesel to Russia.
- Zelenskyy linked the easing of pressure on Moscow to its willingness to continue the war.
What does the OFAC licence entail?
On 9 October, the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury issued General Licence No. 135. It permits certain transactions relating to the sale, delivery, unloading and import of diesel fuel of Russian origin, in particular to the United States.
The licence is valid until 00:01 US Eastern Time on 7 April 2027. It applies specifically to diesel fuel and constitutes a temporary exemption from the sanctions, rather than a complete lifting of US sanctions against Russia.
- The licence does not permit debits to be made from the accounts of the Central Bank of the Russian Federation held with US financial institutions.
- Restrictions also remain in place on the accounts of the National Welfare Fund and the Russian Ministry of Finance.
Stated supply plan
President of the United States Donald Trumpafter speaking with Vladimir Putin said. regarding plans to supply up to 4.8 million tonnes of Russian diesel to the US and global markets in several consignments. The schedule provides for the immediate delivery of over 300,000 tonnes, followed by 500,000 tonnes, 1 million tonnes and a further 3 million tonnes within a short period.
Zelenskyy’s reaction and the military context
Zelenskyy described the easing of pressure on Russia as a move which, in his view, plays into Moscow’s hands and allows it to continue the war for longer. He linked this stance to the continuation of Russian attacks on Ukraine and stated that Russia perceives the easing of pressure as an opportunity to continue hostilities.
A clear example of this was the President’s reaction, which was ballistic missile strike in Kyiv on 10 October.
Where do Kyiv and Washington differ?
As part of its policy on the diesel market, the Trump administration spoke of the need to increase the supply of fuel and reduce prices. At the same time, the text of the OFAC licence does not provide any political justification for its issuance.
According to Zelenskyy in an interview with Axios, Ukraine was prepared to discuss easing energy sanctions in connection with a mutual cessation of attacks on energy infrastructure in Ukraine and Russia. He saw no signs that Moscow was willing to agree to such an arrangement.
The actual economic impact of the licence will depend on whether the stated supply plan is fulfilled. Assessing how Russia’s potential revenues might affect its military capabilities remains the Ukrainian President’s position.
