New Delhi: US President Donald J. Trump announced Friday that his administration will import diesel from Russia, undercutting almost half a decade of sanctions imposed on Moscow, underlining the growing impact of the current global conflicts on fuel markets.
“I have just concluded a highly successful discussion with President Vladimir Putin, of Russia, wherein it was agreed that Russia will immediately supply over 3,00,000 tonnes of diesel fuel to the American and global marketplace, another 5,00,000 tonnes during the month of November, and 1,000,000 tonnes immediately thereafter,” Trump said in a post on the social media platform Truth Social.
The US President added: “Additionally, based on the condition of their diesel refineries, Russia will then deliver, within a short period of time, 3,000,000 tonnes of diesel fuel. Between our total control of the Strait of Hormuz, and this great announcement on Russian energy, diesel prices for Americans and, indeed, the world, will be coming down, in record numbers, and fast!”
The move is a significant win for Russia, as the country’s oil and fuel supplies have largely been sanctioned by the Western countries. The deal also comes roughly a month since the US Congress passed a Bill allowing Trump to impose tariffs of up to 100 percent on countries purchasing Russian and Iranian oil, which faced significant pushback from India.
India, which has been one of the biggest purchasers of Russian crude since its war with Ukraine began in 2022, has been targeted in the past by Trump for its energy trade with Moscow. However, as diesel and gas prices have increased in the US in recent months, since Trump launched strikes on Iran at the end of February, the US President has scrambled to contain the fallout on global markets.
Early in the war his administration allowed the sale of Russian oil already at sea, in the hope of reducing gas prices. However, the sanctions waiver elapsed over four months ago. Diesel prices hit $6.2 a gallon, across the US, according to AAA Fuel Price tracker, which has led to domestic concerns, especially as the country votes for mid-term elections early next month. Last year diesel prices were averaging around $3 a gallon.
Alongside Trump’s announcement, the Office of Foreign Assets Control (OFAC) issued a general licence, authorising the sale of Russian diesel to the US until 7 April 2027. The question now remains whether Russia has the capacity to meet the numbers agreed to by Trump and Russian President Vladimir V. Putin, especially as the country’s refineries have faced intensified strikes by Ukraine.
The curtailment of fuel exports from Russia, coupled with the war in West Asia, have led to the surge in fuel prices globally. Ukraine’s campaign of striking at Russian refineries has taken a significant toll. Trump has criticised Kyiv’s actions in recent weeks, blaming it for the rise in global fuel prices.
However, Ukrainian President Volodymyr Zelenskyy underlined that Kyiv would not hit Russian refineries, if Moscow did not strike its energy infrastructure in a statement following Trump’s announcement of the deal with Putin.
“There must be sanctions under the Lindsey Graham bill, there must be support for Ukraine in protecting lives, and there must be pressure on Russia for its war. And today, there was a conversation between the leaders of America and Russia. A conversation that leads to something different,” said Zelenskyy.
The Ukrainian President added: “Any easing of sanctions against Russia without a clear and lasting de-escalation agreement with Russia is an obvious weakness. It plays into Russia’s hands—allowing it to kill more, wage war for longer, have even less respect for America, and inflict even greater losses and damage on the world. Ukraine is ready to take symmetrical de-escalatory steps, and the American team knows our position.”
It remains to be seen how bi-partisan legislative support for tougher action against Russia within the US Congress will meet Trump’s move to strike oil deals with Putin. According to media reports, the Russian government has offered the sale of stake to the US in the international holdings of Lukoil, one of its oil companies sanctioned by the West, as a part of its larger plan to engage with Washington.
The deals come at a time when Trump is seeking ways to cut the price of diesel. The US midterms, in which all 435 seats in the House of Representatives and a third of the Senate seats are up for election, look challenging for the Republican Party as it seeks to retain its majorities.