Russia has agreed to partially lift its ban on diesel exports, allowing supplies to the U.S. and global markets as part of a deal with the United States. President Donald Trump announced a supply plan that could reach up to 4.8 million tons, but uncertainty about the actual supply volume and schedule, along with ongoing supply disruptions from the Middle East, suggest limited effectiveness in lowering diesel prices worldwide.
According to Bloomberg, Russia announced on October 10 that it would permit the sale of 500,000 tons of diesel abroad. This follows an agreement between Russian President Vladimir Putin and President Trump on October 9 to supply Russian diesel to the U.S. and global markets in large quantities.
Trump stated that Russia would initially supply over 300,000 tons, with an additional 500,000 tons in November and 1 million tons thereafter. He also mentioned that up to 3 million tons could be supplied depending on the condition of Russian refineries. However, Russia has not confirmed the total supply volume or specific delivery schedules.
To facilitate this, the U.S. Treasury Department announced a temporary easing of sanctions on Russian diesel imports until April 7 of next year. This marks a shift from the U.S. policy that has banned Russian oil imports since the early days of the war between Russia and Ukraine in 2022.
However, analysts predict that the volume of Russian diesel exports under this agreement will be limited, and with rising tensions in the Middle East, the impact on prices will be minimal.
The maximum supply of 4.8 million tons translates to approximately 36 million barrels. Compared to the U.S. daily diesel consumption of about 3.6 million barrels, this represents only 10 days' worth, and just 1.2 days' worth of global daily consumption of 30 million barrels. Since this volume is intended for both the U.S. and global markets, the actual price reduction effect may be limited.
Michael Lynch, a researcher at the U.S. Energy Policy Research Foundation, told ABC News, "(The supply of Russian diesel) is like rearranging deck chairs on the Titanic. It may lead to a slight local price drop, but it won't bring about any substantial change in prices across the U.S. or globally."
Following the announcement of additional Russian diesel supplies, market indicators related to diesel fell. According to S&P Global, the crack spread for ultra-low sulfur diesel in the U.S. dropped by $6.45 to $96.80 per barrel on October 9. The crack spread measures the difference between diesel and crude oil prices, serving as an indicator of refinery profitability. However, this decline does not necessarily mean a corresponding drop in consumer diesel prices. On the same day, international oil prices rose due to concerns over shipping disruptions in the Strait of Hormuz.
Experts believe that the ongoing war between the U.S. and Iran is likely to reduce the global supply of refined oil from the Middle East, keeping international fuel prices elevated for the foreseeable future.
This move comes at a time when rising global oil prices, driven by the eight-month-long conflict between the U.S. and Iran, are straining the U.S. economy and consumers.
Diesel prices in the U.S. have surged significantly. According to the American Automobile Association (AAA), the average retail price for diesel in the U.S. was about $6.28 per gallon as of October 9, up approximately 70% from about $3.68 during the same period last year. With the midterm elections approaching next month, rising diesel prices are increasing costs for trucking companies and farmers. If transportation and agricultural prices rise, it could pose a political burden for President Trump.
There are also claims that the U.S.-Russia diesel agreement will benefit Russia. Clayton Seigle, an energy strategist at the Center for Strategic and International Studies (CSIS), noted that Russia is likely to sell its summer diesel stock abroad to secure export revenue before producing low-temperature diesel needed for winter.
Meanwhile, there is strong backlash from Europe and Ukraine regarding the U.S.-Russia diesel agreement. EU High Representative for Foreign Affairs and Security Policy Josep Borrell criticized the easing of sanctions on Russian diesel, stating on social media that it would provide Russia with more funds to continue its war, asserting, "Now is not the time to ease pressure on Russia." He mentioned that EU foreign ministers would discuss additional sanctions targeting Russia's war efforts on October 12.
Ukrainian President Volodymyr Zelensky condemned the agreement, calling it a "gift" to Putin from Trump. He stated, "Allowing Russia to sell oil products is akin to investing in prolonging a war that should be ended."
In response, Trump stated on October 10 that "Ukraine needs a new president," pressuring Zelensky to step down. The Trump administration also warned that it would cease sharing critical intelligence if Ukraine does not stop attacking Russian refineries.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.