New Jersey's warning deepens doubts that Russian diesel reaches the U.S. this year

Traders now consider it unlikely that Russian diesel will be delivered to a U.S. port by the end of December, and the doubts deepened early Wednesday. Only days ago they considered a delivery this year likely. The likely reason is a warning from New Jersey Gov. Mikie Sherrill, reported by The Philadelphia Inquirer and The New York Times. In a letter dated Nov. 2, she told port and terminal operators not to accept Russian diesel and threatened legal and regulatory action.

Across the full set of deadlines, traders expect a long wait for any delivery. Their central expectation is that no qualifying cargo arrives by the end of March of next year, and that is also the single likeliest outcome. When the story began, their central expectation was late November. Bets on delivery by mid-November, the end of November and the end of January have also fallen, and all are now unlikely.

The slide came in stages. Bets on a December delivery rose to near-certain around Oct. 26 and 27, after the Kremlin said on Oct. 23 that the first tanker had sailed. They fell from Oct. 28 through Oct. 30, then held steady through Monday. On Tuesday they collapsed, and they kept sliding overnight and into Wednesday morning.

Sherrill's warning does not block delivery everywhere in the country. It raises a new obstacle to unloading the tanker Agioi Fanendes, which Reuters and S&P Global reported was carrying about 40,000 metric tons and initially signaling New York. The vessel tracker Voydar logged its destination as "for orders" on Oct. 28. The maritime intelligence firm Windward said Tuesday that no Russian diesel had yet reached the U.S. and that the ship still appeared to be heading toward the northeastern coast.

The outcome requires Russian-origin diesel to be physically delivered to a U.S. port or U.S. land territory for commercial or government use. The delivery must be described as arriving under the Oct. 9 Trump-Putin arrangement or be authorized under Treasury's General License 135. Fuel a ship burns itself, cargo held in bond for re-export and fuel passing through to another country do not count.

The legal basis is disputed. Sherrill argues that a 2022 federal law still bars the imports, while Treasury says its waiver complies with applicable law.

The tanker had been expected around Nov. 7, but where it will unload is unconfirmed. Its route, whether any terminal will accept the cargo, possible legal action and credible reporting of an actual delivery will decide whether it counts. Delivery at another U.S. port remains possible.