What General License 135 changes for Russian diesel, and what it does not

General License 135 runs to two short paragraphs. It authorises transactions related to the sale, delivery, offloading or importation of diesel fuel of Russian Federation origin, including importation into the United States, where those transactions would otherwise be prohibited under two sets of US rules: the Russian Harmful Foreign Activities Sanctions Regulations and the Ukraine-/Russia-Related Sanctions Regulations. The authorisation lasts until 12:01 a.m. eastern daylight time on 7 April 2027. The only stated carve-out is that it does not authorise debits to accounts at US financial institutions held by the Central Bank of the Russian Federation, the National Wealth Fund or the Ministry of Finance.

A general licence is a standing permission that anyone can rely on without applying individually, provided their transaction fits its terms. It is not a repeal. The underlying sanctions programmes remain in place, and OFAC can amend or revoke the licence. Notably, the document contains none of the figures from the President's announcement. It names no volumes, no Russian supplier, no buyer and no vessel.

The first and most important limit is geographical. General License 135 is a US instrument. The EU and the UK have banned imports of Russian refined products since February 2023, and as Ship & Bunker reported on 10 October, their shipowners, traders and insurers may only carry or service Russian diesel to third countries at or below the $100 a barrel price cap for premium products. As of 10 October, published analyses found no official EU or UK response suggesting either would follow Washington's lead. Brokers should also avoid confusing the US licence with the UK's General Trade Licence GBSAN0004, issued in May 2026. That UK licence concerns diesel and jet fuel refined in third countries from Russian crude oil. It does not cover diesel of Russian origin.

The second limit sits in Moscow. Russia's ban on diesel, marine fuel and gasoil exports by producers has been in place since July and was formally extended through 31 October. Deputy Prime Minister Alexander Novak has said Russia could partially reopen exports once domestic supply allows, and some reports since Friday suggest restrictions are being eased ahead of schedule, but at the time of writing we have not seen a published Russian decree lifting the ban. At the Valdai Forum on 1 October, Putin said Russia had enough diesel but that sanctions would keep it off international markets. The US licence addresses the second half of that statement. Whether the first half holds depends on Russian refineries, which remain under attack: Ukraine struck the loading terminal at the Novoshakhtinsk refinery within hours of Friday's announcement, according to Newsweek.

The third limit is domestic US law. A bipartisan group of lawmakers has pointed out that Congress banned Russian energy imports in 2022, and Ship & Bunker reports that the Ending Importation of Russian Oil Act remains in effect, with the licence being treated as a temporary executive waiver. We are not in a position to judge how that legal question will be resolved, but it is a source of risk for anyone relying on the licence for US-bound cargoes.

The fourth limit is time. The licence expires in April 2027 and can be changed sooner. Term supply arrangements that run beyond that date have no cover from it.

At a typical conversion of around 7.45 barrels per tonne, 300,000 tons of diesel is roughly 2.2 million barrels, or about eight Medium Range (MR) tanker cargoes of 37,000 tonnes each. The full schedule the President described, 1.8 million tons across three tranches, would be around 13 million barrels, delivered over a period that has not been specified. Before this year's escalation, Russia supplied roughly a tenth of the world's diesel. The announced volumes would help at the margin, particularly if the November and later tranches materialise, but they do not restore Russia's pre-war export role, and every barrel still depends on Russia permitting it to leave.

Markets appear to have read it in roughly that way. Crude fell on Monday, with Brent trading around $103 a barrel, as traders weighed the prospect of more Russian diesel and the claimed energy ceasefire against continued attacks on tankers in the Gulf.

It would be surprising if the licence did not start appearing in offer sheets and letters of intent. The appearance of a licence number in a document is not evidence that a transaction is permitted, still less that the product exists. We would suggest qualifying any such offer in the following order.

Start with jurisdiction. Map every party and service in the chain: buyer, seller, any intermediaries, vessel owner, flag, insurer, financing bank and destination. General License 135 helps only where US regulations are the barrier. If the destination is in the EU or UK, the import ban applies regardless. If an EU or UK shipowner, insurer or trader is involved in a third-country delivery, the price cap rules still bind them.

Then confirm product and origin. The licence refers to diesel fuel. Whether a particular specification, such as a marine gasoil or a heating oil grade, falls within that term is a question for sanctions counsel rather than for the offer sheet. Origin documentation, loadport and the identity of the producing refinery should be clear and consistent.

Next, ask how the seller clears Russia's own rules. While the producer export ban remains formally in force, a seller offering Russian-origin diesel should be able to explain the legal basis on which the cargo can be exported. A seller who cannot answer that question has not answered the most basic feasibility question in the deal.

Check the payment route. The licence excludes certain Russian state accounts at US banks, and banks will apply their own risk appetite on top of the legal position. A proposed structure that depends on letters of credit from institutions with limited appetite for Russian exposure may be legally permissible and still commercially unworkable.

Finally, test the timing. Any contract should address what happens if the licence is amended, revoked or expires before performance is complete, and change-of-law and sanctions clauses deserve close review with legal counsel.

None of these steps is about finding a route around restrictions. A licence that is narrow by design should be applied narrowly, and a transaction should proceed only where every regime that applies to every party permits it.

The next fortnight should clarify a great deal. The questions that matter are whether Russia publishes a decree changing its export ban before 31 October, whether the EU or UK issue any formal statement, whether OFAC publishes guidance or FAQs on the licence, whether the first cargoes actually load and where they go, and whether the claimed energy ceasefire translates into a pause in strikes on refineries.

In both our brokerage work and our broker training, we treat a sanctions licence as the beginning of due diligence rather than the end of it. The headline says Russian diesel is coming back to the market. The licence says something more precise, and the gap between the two is where brokers protect their clients and their own reputations.