The decision to buy Russian diesel while threatening India with punitive tariffs for similar purchases could seem contradictory. However, Washington may make a concession for itself to implement the plan, the sources added.
The US administration has not yet made a final decision on granting India a waiver under the SRIA.
Trump announced the diesel deal following what he called a successful discussion with Russian President Vladimir Putin. Russia will supply more than 300,000 tonnes of diesel immediately to US and global markets, followed by another 500,000 tonnes in November and 1 million tonnes thereafter. Further supplies will depend on the condition of Russian diesel refineries.
The US Treasury Department has issued a licence allowing imports of Russian diesel until April 7.
Trump said the arrangement, along with US control of the Strait of Hormuz, would quickly reduce diesel prices in the US and globally. Diesel prices have risen in the US and Europe due to fuel supply constraints through Hormuz and attacks on Russia’s oil and gas infrastructure.
The deal has faced criticism for potentially providing Moscow with additional revenue amid its war with Ukraine. Ukrainian President Volodymyr Zelenskyy called it a weak decision, while Republican Representative Don Bacon argued that Washington should strengthen sanctions instead of easing them.
Russian diesel supplies could generate billions of dollars in revenue for Moscow, possibly helping fund its war effort. Trump has also advised Zelenskyy to stop attacks on Russia’s oil infrastructure.