The diamond industry must brace itself for another shakeup as restrictions on Russian supply may be lifted sooner than anticipated.
Alrosa’s reintroduction to the market should now be considered an imminent possibility, after President Trump presented a 28-point draft proposal in Kyiv to end Russia’s war in Ukraine. The plan, developed with Moscow’s input, maps out phased and selective sanction relief, a path for Russia to rejoin the G8, and broader US-Russia economic cooperation across key sectors including natural resources.
Since the war began in 2022, the G7 imposed sanctions on Alrosa, cutting the flow of Russia-origin diamonds to the US, UK, Japan, Canada, France, Germany and Italy, markets that together represent roughly two-thirds of global diamond jewelry demand.
The restrictions pushed the trade to accelerate traceability programs that verify where a diamond originated in its rough form, regardless of where the substantial transformation from rough to polished occurred.
Under the current sanction regime, that disclosure relies on importer or exporter self-declaration, although the EU planned to introduce a traceability mechanism to track and verify diamonds moving through the region. While that initiative was unlikely to meet its January 1, 2026 target date when the EU’s next sanctions package is due, the bloc still intends to implement such a system.
The industry still has to follow the rules currently in place, but the Trump plan signals a clear intention and a plausible path toward lifting the sanctions, even if this version does not ultimately advance.
Against that backdrop, if and when the sanctions are lifted, several changes will ripple through the industry.
Ending the sanctions will not stop the push to strengthen source-verification systems. It may be interesting, and somewhat frustrating, if the EU continues to pursue its traceability requirement, but the weight behind the industry’s broader effort will shift from meeting regulatory demands to honoring its own ethical considerations and the need to support clearer storytelling.
From a trading perspective, the relegitimization of Russian production, which represents about 25% of global output, will simplify the supply chain but may also tighten conditions for other miners who benefited from Alrosa’s presumed absence in G7 markets. It brings added competition to move rough at a time when the market is already dealing with more goods than it can comfortably absorb.
It would also reopen the path for Alrosa to ease back into industry structures, where pre-2022 its voice and budget had been gaining weight in bodies such as the Responsible Jewellery Council, the Natural Diamond Council and the World Diamond Council.
The normalization of Russian diamond supply also raises a set of questions the trade will have to work through. The most immediate is the status of Russian diamonds recovered and sold during the sanctions period. Enforcing any continued restriction on those goods would be difficult, which in turn underscores the ongoing importance of source verification.
Enhanced chain-of-custody for diamonds may end up being the sanctions’ lasting legacy. The restrictions forced the industry to broaden the concept of source verification to include origin, meaning the country in which the rough diamond was mined.
It is worth recalling that some of today’s strongest advocates of origin disclosure were once its most vocal opponents. The regulatory environment pushed De Beers to retreat from its long-held claim that aggregation made it impossible to separate production from Botswana, Canada, Namibia and South Africa. Today, the company builds its entire branding around that very concept. The sanctions also pushed the Kimberley Process to enable country disclosure on KP certificates for “mixed” origin parcels.
The Trump proposal is still in its early stages, but whatever one thinks of its approach, the negotiations should signal that the industry must prepare for the day after. Just as the sanctions reshaped the trade, their easing and the return of Russian supply to the mainstream market will once again redefine the industry dynamic.
Image: Alrosa sorter inspects a rough diamond. (Alrosa)
Source : The Diamond Press