According to reports from Reuters and the Associated Press, U.S. President Trump said on October 9 local time that Russia has agreed to supply diesel to the United States and global markets 'immediately'.
Trump is trying to lower high fuel prices before the US mid-term elections, but analysts believe that the limited supply promised by Russia is unlikely to have a significant impact on oil prices.
Trump posted on "Real Social Media" on the 9th, stating that he had a "very successful" discussion with Russian President Putin. "Both parties agreed that Russia will immediately supply over 300,000 tons of diesel to the United States and global markets, with another 500,000 tons supplied in November, followed by another 1 million tons immediately thereafter. In addition, based on the status of Russian refineries, Russia will also supply 3 million tons of diesel in the near future."
Trump claimed that, with the United States' "full control" over the Hormuz Strait, and this recent announcement, diesel prices in the United States and around the world will "drop rapidly, significantly dropping to record levels."
According to TASS, Putin and Trump discussed energy issues over the phone. In a statement issued after the call, Moscow reiterated its willingness to supply oil and petroleum products to the United States and the global market.
On September 9th, the U.S. Treasury issued a general license allowing the import of Russian diesel, with the validity period until April 7, 2027. According to Reuters, this is the first time since the outbreak of the Russo-Ukrainian conflict in 2022 that the United States has granted a sanctions exemption for Russian diesel that exceeds the usual 30-day limit.
However, the White House has not stated who will pay for this batch of Russian diesel fuel, or when it will be delivered. It has also not clarified whether the Russian plan to supply diesel fuel in November will be available by November 3rd, before the U.S. mid-term elections.
On September 9th, local time, in Newtown, Pennsylvania, USA, there was a sticker attached to the price tags of gasoline and diesel at a gas station. The sticker featured a picture of Trump and read “It’s me!” Visual China
The United States and Russia are the first and second largest diesel export nations in the world.
Since the United States launched war against Iran, the price of diesel in the United States has risen by about 70%. Although the price of diesel futures fell after the news was announced, according to data from the American Automobile Association (AAA), the average price of diesel in the United States remains at $6.28 per gallon. Previously, the price of diesel reached a historical high of $6.52 per gallon on September 22.
As the U.S. midterm elections approach, the continuous rise in diesel prices is increasing the pressure on the Trump administration. Trump has repeatedly stated that he is considering banning diesel exports and has been pressuring European allies to release their diesel reserves.
However, with the G7 agreeing to release up to 100 million barrels of emergency oil and diesel reserves, Trump stated on October 2 that he would not ban the export of diesel in the United States.
Meanwhile, in order to alleviate the tight fuel supply in the country and stabilize the market, the Russian government announced on July 8 that diesel exports would be prohibited from that date until July 31. On September 30, it was announced that the ban on the export of diesel, marine fuel, and kerosene to fuel producers would be extended for another month, until the end of October.
After Trump's conversation with Putin, Russian Deputy Prime Minister Alexander Novak confirmed Trump's statement regarding Russia's supply of diesel to the United States and global markets. He told TASS on the 9th, "As one of the major suppliers in the global diesel market, Russia will immediately begin to lift restrictions on diesel exports."
Novak said, “Russia plans to supply the US market and all our partners with 300,000 tons of diesel as early as October. In November, the export volume of diesel will increase to about 500,000 tons, and in December it will reach 1 million tons.” He added that in the long term, Russian diesel exports are expected to further increase to nearly 3 million tons per month.
