UPDATE 1 — Dmitriev says Russian wealth fund will work with US on payment for diesel deal

(Adds quotes, detail, context from 3rd paragraph) By Vladimir Soldatkin and Olesya Astakhova MOSCOW, Oct 16 (Reuters) — The US Treasury has asked Russia's sovereign wealth fund to help solve payment issues relating to a deal between presidents Donald Trump and Vladimir Putin on the sale of Russian diesel, Putin's investment envoy Kirill Dmitriev said on Friday. Dmitriev said the Treasury had requested the Russian Direct Investment Fund, which he heads, to "facilitate payments and solve tactical issues". The RDIF "will work to ensure that all payments are efficient and reach their intended recipients", he added.

The deal announced by Trump a week ago involves the supply of Russian diesel to US and global markets in order to lower the price of the fuel, a key priority for the US president ahead of next month's mid-term elections. But the agreement, fiercely criticised by Ukrainian President Volodymyr Zelenskiy, requires the removal of some sanctions on Russian oil that Trump himself has imposed. "There are so many layers of sanctions piled on top of one another that everyone has become confused; it's difficult now to figure out how to navigate a way out of this situation," Dmitriev told the Russian Energy Week conference in Moscow.

"Brainstorming sessions are already under way regarding how to lift these sanctions — that is exactly what the United States is currently working on." Dmitriev, a key figure in talks between Russia and the United States on ending the Ukraine war, has said the diesel deal could serve as a model for other forms of economic cooperation between the two countries. But he said that the Graham Act, about to come into force in the United States, would effectively prohibit any investment cooperation between the two countries.

The sweeping sanctions and tariff bill, intended to increase economic pressure on Russia over its ​war in Ukraine, is named after late Senator Lindsey Graham, who introduced it. "This law clearly hinders Russian-American projects, as well as the role both nations play in stabilizing energy markets and operating within the global marketplace," Dmitriev said. (Reporting by Vladimir Soldatkin and Olesya Astakhova; Writing by Mark Trevelyan; Editing by Susan Fenton)