A tanker loaded with diesel fuel set sail Friday from Russia for the United States, the first shipment since President Donald Trump agreed a deal with Russian President Vladimir Putin to release more fuel into the global market.
Trump eased some sanctions on the Kremlin two weeks ago and has since waived more, reversing years of American policy despite Moscow’s ongoing illegal invasion of Ukraine in an apparent bid to lower prices ahead of the Midterm elections.
The ship’s departure for the U.S. was confirmed by the Kremlin. The tanker, a Malta-flagged shipped named “Agioi Fanendes,” left a port in Russia’s Primorsk today, according to MarineTraffic tracking data reviewed by NBC News. The ship listed New York as its destination.
Energy Aspects, a market intelligence firm, said that it had confirmed with its industry sources that the ship loaded up 298,000 barrels of diesel in Primorsk.
The firm said that currently the ship plans to unload that fuel in New York. It is expected to arrive on Tuesday, November 10.
The ship’s expected arrival would put it just after the midterm elections. Trump’s Republican party is on edge for potentially heavy losses in House and Senate seats its candidates are defending, driven in part by blowback from consumers facing soaring energy prices.
Trump and his administration have scrambled to try to bring down those prices, which have increased in the wake of supply shocks stemming from the Iran and Russia-Ukraine wars.
Trump has taken a number of steps to warm ties with the Kremlin and pressure Kyiv to agree to end the war, drawing outrage from Ukraine and its bipartisan backers in Congress.
“I believe there have already been reports from the Ministry of Energy that the first tanker has departed for its destinations and that further shipments will continue on a regular basis,” Kremlin spokesman Dmitry Peskov said early Friday.
Crude oil was headed for a third straight weekly gain. Brent, the most important global oil benchmark, traded around $114 per barrel, less than $13 away from its highest point this year.
Since the start of the year, the average price of diesel fuel has soared from $3.55 per gallon to $6.32, an unprecedented rise of 78%.
Energy Aspect’s analysts said the impact of the cargo’s arrival would likely be “limited.”
Diesel’s sky-high price has troubled economists more than the jump in the price of regular gasoline because, “the cost of diesel gets into just about everything,” as KPMG chief economist Diane Swonk told NBC News in an August interview.
“Everything from … running a farm … cost of food, but also everything across the economy that’s shipped gets that extra fee tacked onto it,” she said.
Currently, U.S. daily diesel demand is about 3.8M barrels per day, meaning that Friday’s shipment would satisfy not even a full day’s worth of usage.
“Global distillate markets have tightened sharply,” said Bank of America’s head of global commodities Francisco Blanch in a recent note, adding that it signals “an acute scarcity of refined products.”
Diesel is a distillate fuel, produced by refining crude oil.
“Geopolitical disruptions are exacerbating that shortage as attacks on shipping around Hormuz make energy flows more difficult and costly, while attacks on Russian refining capacity further restrict product availability,” he wrote.
Russia has historically been one of the world’s largest exporters of diesel.
In September and for some of October, the Kremlin restricted the export of diesel fuel amid a Ukrainian campaign of attacks on its energy infrastructure. It lifted those export restrictions after Putin’s diesel deal with Trump.
Easing sanctions on Russia to open up some previously-blocked diesel supplies was just the latest in a number of policy levers pulled by Trump.
In just the last few weeks, the president has also signed an order allowing more widespread use of an off-road variety of diesel. The administration also pressured European allies, particularly Germany and France, to urgently release some of their diesel reserves.
The administration has also reportedly pushed for a fresh release of crude and diesel reserves, though the International Energy Agency has rebuffed that request.
Experts say that even all together, Trump’s actions will do little to help ease prices which have continued to trend higher.
“Policy intervention can provide temporary relief, but there is no silver bullet for diesel,” Blanch wrote.