Russian Diesel License Cuts NY Harbor Fuel: JetBlue, Star Group Upside

On October 9, 2026, the US Treasury issued a license allowing Russian diesel to be sold and landed in the US, Ship & Bunker reported, and New York Harbor wholesale diesel fell about 4.5% that day. The Russian diesel license could lower fuel costs for Northeast heating-oil retailers and airlines. [1][2]

OFAC General License 135 authorizes the sale, delivery, offloading or importation, including into the US, of Russian-origin diesel through April 7, 2027. [2]

The license followed a Trump-Putin call. Russia has banned diesel exports since July 8, and Putin agreed to release up to 4.8 million tonnes onto the world market. [1] Trump said Russia would supply more than 300,000 tons immediately, 500,000 tons in November, then 1 million tons and another 3 million tons shortly after. [3] Russia said exports may exceed those volumes, [4] while Bloomberg reported Russia can't export as much as Trump needs. [5]

New York Harbor wholesale diesel fell about 4.5% to $4.67 a gallon on the announcement. [1] Seven US senators called for the deal's reversal, [6] and the EU said it would keep Russia sanctions. [7]

Background: middle distillates and New York Harbor

Diesel, heating oil and jet fuel are all middle distillates, and their prices broadly move together.

New York Harbor prices East Coast fuel. The Northeast burns heating oil in winter, and East Coast markets are short refining capacity and depend on imports. [8]

Supply has been unusually tight this year. In September the NYMEX heating-oil crack against crude hit an all-time high. [9] By late September, New York's statewide average home heating oil price reached $6.27 a gallon. [10]

The crack spread is a product's price minus crude cost, roughly a refiner's per-barrel earnings on it; a higher crack means higher costs for buyers.

How Russian diesel could lower New York Harbor fuel costs

First, Russian diesel can now reach the East Coast: 4.8 million tonnes is about 36 million barrels over six months, roughly 200,000 barrels a day.

Second, the first 300,000 tonnes load in October and arrive around November after about three weeks from the Baltic.

Third, extra supply lowers New York Harbor diesel prices and cracks; heating oil and jet fuel broadly follow.

Fourth, sellers' margins narrow. PBF Energy's (PBF) two East Coast refineries ran about 300,000 barrels a day in 2025, with a 39% distillate yield. [11] On October 9, PBF fell 5.7%, Valero (VLO) 2.3% and Marathon Petroleum (MPC) 1.8%. [12]

Fifth, buyers that cannot pass fuel costs through right away could benefit.

Companies that could be affected

JetBlue (JBLU) is a US airline. Its 10-K says that, given its dependency on New York Harbor jet fuel, it may be hit harder than competitors by price spikes as US exports fill the void left by Russia. [13] It had no outstanding fuel hedging contracts at the end of 2025. [13]

In Q2 2026, JetBlue paid an average $4.23 a gallon for 215 million gallons, about $909 million of fuel, or 34% of $2,697 million in revenue. [14]

On our estimate, if New York Harbor jet fuel gives back half the diesel move, about $0.10 a gallon, over two quarters of about 430 million gallons, fuel cost would fall by about $43 million, roughly 12% of the $365 million first-half 2026 operating loss. [14] Whether jet follows diesel is an assumption, and the ratio sits on a loss-making base. JBLU closed at $3.84 on October 9, down 2.0%, and at $3.62 on October 12, down 5.7%. [12]

Star Group (SGU) is the largest US home heating oil retailer, with about 59% of customers in New York, New Jersey and Connecticut. [15] In fiscal 2025, 63% of sales came from home heating oil and propane, on 282.6 million retail gallons. [15]

The company says heating oil prices are closely linked to diesel, and that higher heating costs lead to customer conservation and more customer losses. [16] In August, management said Iran tensions had raised wholesale prices, which may affect when customers enroll in price-protection plans. [17]

If wholesale prices ease into the October-March heating season, Star's volumes and retention could benefit. On our estimate, recovering about 1% of conservation plus about a quarter of fiscal 2025's 13.2 million gallons of net attrition, about 6 million gallons, at roughly $1.80 a gallon of margin, would be worth about $11 million, roughly 8% of fiscal 2025 adjusted EBITDA of $136.4 million. [15]

Star's market value is about $430 million. [18] SGU was unchanged on October 9 and closed at $13.11 on October 12, up 0.9%. [12]

What to watch

The first signal is EIA weekly East Coast (PADD 1) distillate imports and stocks: rising imports and rebuilding stocks in November-December would show Russian barrels landing.

The second is cracks and loadings. Through November, the heating-oil crack against Brent should hold well below the September record, and tanker tracking should show whether the 300,000-tonne October and 500,000-tonne November loadings happen.

The third is company reports: JetBlue's late-October Q3 report and Q4 fuel-per-gallon guide; PBF's Q3 East Coast margin commentary; Star's early-December fiscal Q4 report on price-protection enrollment and attrition. The full effect shows in JetBlue's Q4 results (late January 2027) and Star's fiscal Q1 (early February). The effect reverses if the license lapses on April 7, 2027.

The chain breaks if Ukrainian strikes keep Russia from lifting its ban early or filling the October and November volumes; if the license is revoked or narrowed after the Senate challenge; if a Hormuz escalation or similar shock pushes the New York diesel crack back above about $100 a barrel through November; or if New York jet fuel decouples from diesel, which would remove the JetBlue link.

This piece only maps transmission chains that may be overlooked. It is not a stock recommendation.

Sources

[1] Ship & Bunker · 2026-10-09 · US lifts sanctions on Russian diesel for six months · https://shipandbunker.com/news/world/445068-us-lifts-sanctions-on-russian-diesel-for-six-months-after-trump-putin-call [2] US Treasury OFAC · 2026-10-09 · General License 135 · https://ofac.treasury.gov/media/937216/download [3] WGAN · 2026-10-12 · Russian diesel supply schedule · https://wgan.com/news/074470-sen-collins-joins-bipartisan-letter-opposing-diesel [4] Asharq Al-Awsat · 2026-10-12 · Russia says diesel exports may exceed Trump's volumes · https://english.aawsat.com/world/5328915-russia-says-its-diesel-exports-may-exceed-volumes-announced-trump [5] Bloomberg · 2026-10-12 · Russia can't export as much diesel as Trump needs · https://www.bloomberg.com/news/newsletters/2026-10-12/russia-can-t-export-as-much-diesel-as-trump-needs [6] WIKY · 2026-10-11 · Senators call for reversal of Russian diesel deal · https://wiky.com/2026/10/11/prominent-republican-senator-says-trumps-russian-diesel-deal-may-be-illegal/ [7] Novinite · 2026-10-12 · EU to maintain Russia sanctions · https://www.novinite.com/articles/241002/EU+Vows+to+Maintain+Russia+Sanctions+Despite+Trump-Putin+Diesel+Deal [8] Drillr call summary · 2026-07-30 · PBF Energy Q2 2026 call [9] MarineLink · 2026-09-14 · Heating-oil crack at all-time high · https://www.marinelink.com/news/oil-prices-jump-week-high-saudi-energy-542922 [10] WKBW · 2026-09-29 · NY heating oil averages $6.27 a gallon · https://www.wkbw.com/news/politics/high-energy-prices-become-political-flashpoint-five-weeks-before-election [11] PBF Energy · 2026-02-12 · Q4 2025 earnings 8-K, supplemental operating information [12] Drillr price data · 2026-10-08 to 2026-10-12 · PBF, VLO, MPC, JBLU, SGU daily closes [13] JetBlue · 2026-02-12 · 10-K FY2025 [14] JetBlue · 2026-07-28 · 10-Q Q2 2026, operating statistics [15] Star Group · 2025-12-09 · 10-K FY2025 [16] Star Group · 2024-02-07 · 10-Q fiscal Q1 2024 [17] Drillr call summary · 2026-08-06 · Star Group fiscal Q3 2026 call [18] Drillr company snapshot · 2026-10-12 · market capitalization