Trump’s Diesel Deal Irks Allies and Is Unlikely to Reduce Prices

By Nick Wadhams (Bloomberg) — President Donald Trump’s deal for Russian diesel exposed the US to legal questions, opened a rift with his Republican allies and European leaders and heightened tensions with Ukraine — all in exchange for an outcome that experts suggest is unlikely to succeed.

Under the agreement — announced late last week — Russian President Vladimir Putin would begin releasing diesel supplies into global markets as part of a US effort to bring down prices from their record highs before the Nov. 3 midterm elections. Trump has also intensified demands on Ukrainian President Volodymyr Zelenskyy to stop attacking Russian refineries and announced an energy ceasefire between the two sides.

The decisions and the ceasefire are all a bet that lowering fuel prices will be the best way to win more votes next month despite the risk of a backlash from political friends and foes alike. On Sunday, a bipartisan group of senators argued that Trump should “reverse course” on his plan to cut a diesel deal with Russia. 

“The United States should not provide Putin with a financial lifeline while Russia continues to kill Ukrainian civilians,” the senators said in a statement.

The accord also provoked fresh tension with Europe, where officials warned that it would bolster Moscow’s war effort in Ukraine. They said the US should impose more sanctions instead.

“We would call on the US to put the sanctions in place so that actually we could finish this war, so that all the effects of these attacks on refineries would not be there,” top European Union diplomat Kaja Kallas told reporters in Luxembourg on Monday before meeting with the bloc’s foreign ministers.

There’s also the legal challenge. A 2022 law prohibits the US from buying most Russian energy products. It’s still not clear how Trump plans to get around that, and some lawmakers, including Senator Roger Wicker, a Mississippi Republican, have already said they don’t expect the deal to go through.Play Video

Trump acknowledged on Monday that neither side had actually committed to stop attacking each other’s energy infrastructure.

“They agreed. You know why? Because I said you agree,” Trump told reporters. “That’s why they agreed — because I said they agreed.”

“I think actually Putin wants to make a deal more than Zelenskyy,” Trump said.

Keith Kellogg, the president’s former envoy to Kyiv, dismissed Trump’s latest disagreement with Zelenskyy as “noise.” He said he didn’t expect it to escalate to anything similar to their infamous face-to-face argument in the Oval Office in February 2025. 

“The rhetoric will kind of take care of itself,” Kellogg said. “Look at what’s happening on the ground.”

That’s all in exchange for an effort to bring down global diesel prices that have remained stubbornly high, mostly because of the Iran war, which has throttled traffic through the Strait of Hormuz. Russia’s conflict with Ukraine also played a role, after Russia extended a ban on diesel exports through September following a wave of Ukrainian drone strikes on the country’s refineries.

Unfortunately for Trump, even if Russian diesel reaches the global market in the coming weeks, it probably won’t offer much relief for American farmers and truckers before the midterms.

The first release of 2.25 million barrels in October is 1.4 million barrels less than American consumers used in a single day as of early in the month. Shipments from Russia to the East Coast typically take more than two weeks, and record-high shipping costs would also likely push prices higher.

If Russian refineries are able to resume some exports, it would provide marginal relief to a global oil market that’s sorely missed the supply, analysts say. Yet whether those shipments restart in earnest depends on the durability of an energy ceasefire that Trump announced over the weekend. Neither Russia nor Ukraine said they had agreed to such a deal.

Russian Deputy Prime Minister Alexander Novak said monthly diesel exports of 3 million tons — near levels seen before Ukraine’s drone campaign — will only be possible after December.

“There is no indication that any diesel is making its way to the US just yet,” Bloomberg geoeconomics analyst Alex Kokcharov wrote in a note. “Given questions around the legality of easing sanctions and Russia’s own export capacity, it’s not clear this will result in any net increase to global diesel supplies.”

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