The President of the United States, Donald Trump, announced an agreement with his Russian counterpart, Vladimir Putin, to facilitate the arrival of up to 4.8 million tons of Russian diesel to international markets, with the aim of alleviating the fuel shortage and containing prices, skyrocketed by the energy crisis resulting from the war with Iran.
The pact, announced on Friday, October 9, includes a temporary easing of U.S. sanctions on certain operations with Russian diesel, without implying the general lifting of the economic restrictions imposed on Moscow due to the invasion of Ukraine.
The decision comes less than a month before the U.S. legislative elections on November 3, in which the rising cost of fuels has become one of the main economic problems for the Trump Administration. At the same time, it allows Russia to recover part of its energy exports, a fundamental source of income for its economy.
How much Russian diesel will reach the market
According to the quantities announced by Trump, the agreement provides for initially releasing 300,000 tons of diesel, to which another 500,000 would be added during November and one million tons in a later phase.
The commitment includes an additional batch of three million tons, still without a precise schedule, until reaching a total announced volume of 4.8 million tons.
The execution will depend on the capacity of Russian refineries to produce the fuel, transportation conditions, and the availability of buyers who can take advantage of the U.S. authorizations.
The U.S. Department of the Treasury has announced a temporary license to allow certain commercial operations with Russian diesel. Therefore, it is not a general elimination of energy sanctions, but an exception aimed at facilitating the supply of this fuel.
Why Trump needs diesel from Russia
The main objective of Washington is to reduce pressure on fuel prices, especially diesel, whose increase directly affects the transportation of goods, agriculture, and distribution costs.
The war with Iran and the difficulties for the transportation of oil and derivatives through the Strait of Hormuz have worsened international supply problems. This is compounded by the damage suffered by energy facilities and the difficulties in quickly increasing refining capacity.
Diesel has particular economic importance because it is used in heavy transportation, agricultural machinery, and numerous industrial activities. Its increase in price can be passed on to the final price of food and other products.
The U.S. electoral calendar adds pressure to the White House. The legislative elections on November 3 will be held in a context of high energy prices, so a reduction in fuel costs would alleviate one of the main economic concerns of consumers.
What Russia gains from the agreement
For Moscow, the main advantage is the possibility of recovering income from the export of petroleum products at a time when Western sanctions continue to limit its trade relations.
The U.S. flexibility allows for the marketing of certain quantities of Russian diesel and expands the possibilities of finding international buyers.
These revenues are particularly relevant because energy exports constitute an important source of funding for the Russian state, which maintains its military offensive against Ukraine.
However, Russia's ability to meet the announced volumes is not guaranteed. Ukrainian attacks on refineries and oil infrastructure have affected its production, and Moscow has had to impose restrictions on certain exports to protect its own supply.
Will the price of diesel drop?
The arrival of Russian fuel could partially alleviate supply tensions, but the impact on prices will depend on the quantities that are ultimately marketed and on the evolution of the international energy market.
The announced volumes must be compared with global diesel consumption and with the supply needs of the main importing countries.
Moreover, the distribution of fuel will not be immediate. It will be necessary to organize commercial operations, maritime transport, and deliveries, while logistical difficulties arising from the international situation persist.
The agreement also does not guarantee an equivalent reduction in prices at U.S. gas stations, as these depend on additional factors, such as refining, transportation, distribution, and taxes.
New tensions with Ukraine
The U.S. decision has provoked the rejection of Ukrainian President Volodymyr Zelensky, who believes that the easing of sanctions will allow Moscow to obtain new revenues to finance its military offensive.
The agreement has been announced while representatives from the United States, Ukraine, and several European countries are holding talks in Miami to try to move towards a peace proposal. However, the negotiation remains blocked by differences over the Ukrainian territories occupied by Russia.
According to the Financial Times, U.S. envoys Steve Witkoff and Jared Kushner warned Ukrainian representatives that the continuation of attacks on Russian oil facilities could jeopardize the exchange of intelligence information between Washington and Kiev.
Ukrainian attacks on Russian refineries aim to reduce fuel production capacity and Moscow's energy revenues. The U.S. request to stop these operations introduces a new discrepancy between both governments, as Ukraine believes that these facilities contribute to the Russian war effort.
Exception to the sanctions that will last until April 2027
The decision also represents a change in U.S. policy towards Russian energy exports. Washington had maintained restrictions on these operations since the invasion of Ukraine in 2022, with the aim of limiting Moscow's revenues.
The Office of Foreign Assets Control of the Department of the Treasury (OFAC) has issued General License 135, which authorizes certain operations for the sale, delivery, unloading, and import of Russian-origin diesel until April 7, 2027. The measure does not eliminate the set of U.S. sanctions nor does it itself modify European restrictions.
The European Union has questioned the decision as it believes it provides new resources to Russia while the war continues. Its Foreign Policy Chief, Kaja Kallas, has reiterated that Brussels does not intend to reduce economic pressure on Moscow.
Agreement with still uncertain economic effects
Although the markets recorded an initial drop in diesel prices after the announcement, experts consulted by Associated Press consider its potential to sustainably lower fuel prices to be limited. The operation could redistribute supplies among buyers without significantly increasing global availability.
In addition, Russia has suffered a reduction in its refining capacity due to Ukrainian attacks and had restricted its own exports to ensure internal supply.
Therefore, the agreement offers Trump a possible way to ease prices before the U.S. elections, while Putin obtains a relaxation of trade restrictions. The unknown is whether Russia will be able to supply the announced quantities and whether the effect on prices will offset the diplomatic consequences of the decision.