Warning of Harsh Penalties for Terminals Importing “Illegal" Russian Diesel
Pressure continues to mount regarding the potential arrival of shipments of Russian diesel fuel to the United States, with the Governor of New Jersey releasing a letter sent to ports and terminal operators. The pressure campaign appears to be having an effect, as the latest tracking shows only one product tanker still bound for the United States.
Governor Mikie Sherrill followed through on her earlier remarks and, on November 2, sent a letter to port and terminal operators in New Jersey warning of likely "harsh penalties" and warning that New Jersey would “use every available legal and regulatory tool” in efforts to stop the arrival of Russian diesel fuel.
The letter warns that the consequences of allowing any vessel containing Russian fuel to unload or purchasing the fuel could subject the operators to “millions of dollars in penalties long after Trump has left office and his corrupt administration has come to an end.”
Sherrill contends that the importation “directly conflicts with federal law.” The letter points out that the U.S. Congress enacted legislation in April 2022 ending the importation of Russian oil and notes that only Congress can repeal the act. The letter asserts the president and executive branch do not have the legal authority to bypass the act of Congress.
Donald Trump heralded a deal with Vladimir Putin and Russia to import Russian diesel as a way to lower the skyrocketing price of the fuel in the United States and on the world market. The administration issued a license for the importation of the diesel fuel, but Sherrill contends in the letter neither the president nor the Department of Treasury has “blanket authority to waive these sanctions through licenses.”
The letter asserts that the only exception is if the president can certify Russia has agreed to withdraw its forces from Ukraine. Alternatively, the license would require completion of a congressional review process before it could go into effect. Under U.S. law, persons who import the illegal fuel “shall be liable to a penalty equal to the value” of the articles imported.
Sherrill’s warning follows other objections from members of Congress. Sherrill had said last week that New Jersey was evaluating its options. Senator Richard Blumenthal of Connecticut had also issued a statement calling on the shipping companies to recall the tankers loaded with diesel.
Russian officials had stated publicly that three tankers had departed with the diesel exports for the United States. They were expected to reach the United States possibly as early as the end of this week. Other sources contended that as many as six or seven tankers were bound for the United States, although at least one report had to be retracted when the operators asserted their vessel had liquid fertilizer and not diesel fuel.
Analysts at Windward continued to track the supposed product tankers bound for the United States. In a report released today, they highlight that another one of the tankers, Talisman, recently changed its AIS transmission to “for orders” and the vessel has turned east, passing the Strait of Gibraltar into the Mediterranean. The product tanker Leruo also changed its AIS to show “Brazil for orders.” Windward highlights that both vessels represented additional challenges for the ports as they not only appear to have Russian diesel loaded but are also operating under sanctions.
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Only the Greek-owned product tanker Agioi Fanendes appears to still be bound for the U.S. Atlantic East Coast. It had originally displayed New York as its destination but also changed the transmission to “for orders.” The vessel appears to be in the middle of the Atlantic continuing its westbound course.
Industry executives and analysts have said the amount of diesel bound for the United States amounted to nothing more than a symbolic gesture. Consumption far exceeds the amounts being sent, and the forecast was that the imports would have no meaningful impact on the cost of diesel fuel in the United States, which is currently averaging well over $6.00 per gallon and in many places reaching and exceeding $7.00.
