President Donald Trump has announced a deal to import Russian diesel into the US, as he faces mounting pressure to bring down fuel prices. Trump said Putin had agreed to release 300,000 tonnes of diesel immediately “to the American and global marketplace” followed by 500,000 tonnes in November and another million after that. The move on Friday sparked anger from Ukraine’s President Volodymr Zelensky, who called it a gift to Putin that amounts to “an investment in a war that must be ended, not prolonged”. It is understood the US Treasury is suspending sanctions on Russian diesel exports until 7 April as part of the deal, but other assets like those in American banks are still frozen.
In his Truth Social post, Trump added that a further three million tonnes of Russian diesel would be delivered “within a short period”, dependent on the condition of its refineries, which have seen attacks by Ukraine. Putin later said Russia, which introduced a ban on diesel exports earlier this year, was willing to supply both the US and global markets with oil and petroleum products, but his statement did not specify amounts. Analysts, however, have questioned whether Russia is capable of providing that quantity of diesel and the extent to which doing so will ease prices for American consumers. Analysis: Trump’s shock Russia deal highlights mounting pressure to curb fuel prices Tim Armitage, investment strategist at Quilter Cheviot, said the numbers mentioned by Trump were “relatively small”.
He said the first tranche equated to approximately 2.25m barrels, and daily US consumption was around 3.8m barrels, “so it won’t make a material difference to pump prices in the US”. “Granted, there are then two more releases to come, but it does appear to be a slightly desperate move by President Trump to try to lower inflation ahead of the midterms.” The BBC has asked the White House what Russia will get from the US in return for the commitment. Meanwhile, the UK government spokesperson said its position “could not be clearer” and it would continue working with international partners to support Ukraine and bring about sustained peace. “We will also maintain pressure on Russia through the toughest sanctions regime ever imposed by the UK, increasing the cost of Putin’s aggression and supporting efforts to secure a just and lasting peace.” Friday’s announcement is the latest effort from Trump to lower fuel prices in the US, as he has spent months grappling with the political consequences of the Iran war, which began in February, and its impact on global energy prices.
That conflict has sent the cost of petrol and, in particular diesel, skyrocketing in America in recent months, which has soured his standing with the public who have been stung by the higher pump prices and knock-on effects that led to across-the board inflation. The average diesel price in the US is currently $6.28 (£4.74) a gallon, according to the AAA, down from the record high of $6.53 recorded at the end of September. Shortly after Trump’s announcement, the US Treasury formally issued a temporary licence allowing Russian diesel into the market. Putin said in a statement that he had spoken to Trump about the global energy situation on Friday, adding: “The Russian side confirmed its willingness to supply oil and petroleum products to the US market and global markets at large.” An envoy for Putin, Kirill Dmitriev, welcomed the deal on social media, saying: “Russia-US co-operation on diesel and energy will benefit the world.” But Zelensky hit out at it, saying “gifts to Putin will not work for peace” and that Russia would repay the diesel with “further terror”.
“We count on America’s fair support for our defence of life, for our defence of people in Ukraine – and on the United States having a correspondingly strong conversation with Russia. A strong one, not a weak one,” he wrote. Russia has this year experienced two waves of severe fuel shortages across the country as a result of Ukrainian drone strikes on Russian oil refineries. According to the International Energy Agency, its diesel production is estimated to have fallen by nearly 30%.
Trump has expressed his displeasure over those attacks, blaming them for rising fuel prices. But Zelensky defended the strikes on Friday, saying there were in response to “Russia’s years-long campaign of terror against Ukraine’s energy sector”. “Ukraine will not set Russian oil refineries on fire if Russia does not destroy our energy infrastructure,” he said. Trump wants to reduce the cost of fuel as the midterms loom – will it work?
Trump’s Truth Social posts often provide incomplete information and the details of exactly how Russia is supplying this fuel to the global market, and what they might get for in return is unclear. But the announced deal represents a remarkable about-face, as the US Congress recently enacted legislation – signed by the president – to authorise new American sanctions and tariffs on nations that import Russian oil and gas. The agreement with Russia also opens Trump up to criticism from European allies and pro-Ukraine politicians in the US, that the American president is now helping to fund Moscow’s war machine. What impact the deal with Russia will have on fuel prices also remains unclear.
The global benchmark for crude oil, Brent, remains above $103 a barrel. Before the war with Iran, Brent crude was trading at about $73 a barrel. With the looming US midterm congressional elections – which will determine if Republicans maintain control of Congress – Trump has been searching for ways to ease his Republican party’s political pain. Earlier this week, he said he was “thinking about” suspending the federal tax on gasoline and also announced that he would allow so-called red dye diesel to be used on US highways without facing federal tax.
Trump has also successfully pressured G7 nations into releasing 100 million barrels of oil and diesel from stockpiles to help ease supply concerns, and previously supported calls for a ban on diesel exports from the US.
