Key facts
- US diesel prices have risen nearly 70% since the start of the Iran war, reaching about $6.30 a gallon.
- The deal involves 300,000 tonnes of diesel immediately, followed by 500,000 tonnes in November and 1 million tonnes later.
- The initial 300,000-tonne shipment is about three-quarters of the US's daily diesel consumption.
- Analysts predict the deal will have little meaningful impact on current high diesel prices due to small quantities and delivery times.
- The US Treasury suspended sanctions on Russian diesel exports until April 7.
- Ukrainian President Volodymyr Zelenskyy stated the deal would encourage Russia's attacks.
Donald Trump's agreement with Vladimir Putin to temporarily lift sanctions on US imports of Russian diesel is unlikely to significantly impact current fuel prices, according to energy and foreign policy analysts. Trump announced on his Truth Social network that the deal, aimed at reducing soaring US diesel prices, would supply millions of tonnes of diesel to the American and global marketplace.
The package includes an immediate shipment of 300,000 tonnes, followed by 500,000 tonnes in November and another 1 million tonnes thereafter. Calculations suggest the initial 300,000-tonne figure is roughly equivalent to three-quarters of the US's daily diesel consumption. Trump stated that lower prices for Americans, particularly farmers, ranchers, and truckers, were his top priority.
However, experts like Ashley Kelty, an energy analyst at Panmure Liberum, believe the quantities and delivery timeline are insufficient to affect prices. Kelty noted that the shipments would take about three weeks to arrive, placing them close to the US midterm elections. The US Treasury suspended sanctions on Russian diesel exports until April 7 as part of the agreement.
Ukrainian President Volodymyr Zelenskyy criticized the deal as a "weak decision" that could embolden Russia. Trump, in turn, blamed Ukraine's strikes on Russian energy infrastructure for rising fuel prices and suggested Ukraine needed "a new leader." He later posted that an "ENERGY CEASEFIRE" was in effect between Russia and Ukraine.
Maximilian Hess, founder of Enmetena Advisory, echoed the sentiment that the deal would have no meaningful domestic or international effect. He suggested that the full terms of the deal were unlikely to be met due to Ukrainian drone strikes on Russian refining facilities limiting diesel output. Hess also posited that the deal's failure, which Putin could blame on Ukraine, would serve to increase tensions between Trump and Zelenskyy.