Russian Diesel Heads for US as Container Lines Return to Suez

The first cargo of Russian diesel bound for the US since 2022 was due to set sail on Thursday under a fuel deal struck between President Donald Trump and Vladimir Putin. Meanwhile, container lines are steering more ships back through the Suez Canal, a shift that could reshape freight costs on US trade lanes next year.

Russian Deputy Prime Minister Alexander Novak said a tanker carrying 40,000 metric tons of diesel, about 300,000 barrels, would leave port on Thursday. “More batches will follow,” he said. Moscow has pledged 500,000 tons in a first phase and plans to raise exports through November and December, potentially reaching 3.5 million tons a month by year-end.

The shipment comes as diesel trades above $200 a barrel, weeks before the Nov. 3 midterm elections. Analysts say the volumes are too small to move prices meaningfully. Lawmakers in the US and Europe have warned that the trade will help fund the Kremlin’s war in Ukraine.

At sea, carriers are gradually returning to the Red Sea route despite continued security risks in the region. Suez routings have recovered to roughly 30% to 35% of normal levels, according to liner analyst Lars Jensen, who called the measured pace “a positive surprise.” Hapag-Lloyd Chief Executive Officer Rolf Habben Jansen said the Gemini alliance with Maersk expects to move nearly all its services back to Suez in the first quarter of 2027, provided conditions hold.

For US importers, the near-term picture remains costly. According to the Freightos Baltic Index, Asia-to-US East Coast spot rates rose 1% to about $9,700 per forty-foot container, while West Coast rates held near 8,126 dollars. Transpacific prices are still about 25% above a year earlier. Analysts warn that the extra capacity freed up by shorter Suez voyages could deepen oversupply in 2027 if demand fails to keep pace.