US President Donald Trump has stepped up his efforts to lower US diesel prices by lifting sanctions on Russian diesel exports and announcing a ceasefire on energy infrastructure between Russia and Ukraine.
Soaring US diesel prices are hurting US truckers and farmers, and are a concern for voters and political parties ahead of 3 November midterm elections.
US prices were down 0.5% on Monday (12 October) following Trump's announcements.
HOW MUCH DIFFERENCE WILL RUSSIA'S RELEASE MAKE?
Trump said on Friday that Russia will immediately supply more than 300,000 metric tons (2.25 million barrels) of diesel to US and global markets.
That is less than a day's supply for the US transport sector alone, according to US Energy Information Administration data, which shows daily use of around 2.94 million barrels per day.
Trump said Russia would supply another 500,000 tons in November and a further 1 million tons "immediately thereafter", which is less than four days' demand for US transport.
WHAT HURDLES MIGHT THERE BE?The US has lifted sanctions on Russian diesel exports, but it remains unclear what tankers could be used to export the fuel given sanctions on many, and what the condition is of Russian refineries given recent Ukrainian attacks on them.
HOW MUCH CAN RUSSIA EXPORT?
Russia was capable of exporting about 100,000 tons of diesel per day prior to Ukrainian drone attacks on refineries that began in 2024.
In light of damage to its refineries, Russia banned diesel exports from July to meet domestic demand and extended that ban to countries without bilateral agreements until 31 October , while sustaining steady exports to "friendly" states, mostly in Central Asia.
If Ukraine halts attacks on Russian refineries, Russia would be capable of meeting the initial request from Trump for 300,000 tons of diesel exports, according to industry sources.
Russia could produce 300,000 tons of diesel this month if a large oil refinery hit by drones in the European part of the country were to restart, the sources said.
WILL MORE DIESEL EXPORTS HELP RUSSIA'S ECONOMY?
According to Russian President Vladimir Putin, Ukrainian strikes on oil refineries cost Russia's economy 1% of gross domestic product, which is around $26.6 billion, according to Reuters calculations.
Exports of 300,000 tons of diesel would fetch roughly $400 million, of which a small portion would go to Russia's state budget. Russia taxes mostly oil output, not oil and fuel exports.
Russia has around 30 large oil refineries, while none are functioning in Ukraine.
WHAT'S BEEN THE REACTION TO TRUMP'S ANNOUNCEMENTS?
Moscow said on Saturday it had partially lifted the ban on diesel exports in place since July with immediate effect.
Ukraine's President Volodymyr Zelenskiy said Trump's diesel supply deal with Russia would embolden Moscow's attacks on Ukraine and cost more lives.
US lawmakers also criticised the move, including one of Trump's fellow Republicans, Representative Don Bacon, who said it was time to apply more sanctions that Congress had recently passed, not lift them.
British Prime Minister Andy Burnham said his country would strengthen its sanctions on Russia. German Foreign Minister Johann Wadephul restated Berlin's support for Ukraine's leader after Trump called for his removal, and called for more pressure to be put on Russia to resume peace talks.
The Kremlin said on Monday the talks were continuing on the ceasefire, while declining to comment on whether that is related only to oil refineries.
CHINA'S IMPACT ON DIESELChina is set to resume refined fuel exports after a brief halt during the Golden Week holiday, Reuters reported.
However, its approved October exports of diesel, gasoline and jet fuel, at around 3.7 million metric tons, are down sharply from a year earlier and lower than the more than 4 million approved for September.
WHY HAVE DIESEL PRICES BEEN SO TIGHT?
In addition to Russian export challenges, the Iran war has curbed supply from Gulf producers.
IEA SPURRING MORE SUPPLY
The Group of Seven nations agreed recently to release fuel from their strategic reserves, coordinated by the International Energy Agency.
The 32-nation IEA coordinated the world's largest emergency stocks release in March of over 400 million barrels of crude oil and products, and has recently prodded participating countries to offer any unreleased volumes to market.