Donald Trump announced a deal to import Russian diesel into the US, suspending Treasury sanctions on such exports until April 7. The arrangement calls for 300,000 tonnes of diesel released immediately, followed by 500,000 tonnes in November and one million tonnes after that, with Trump claiming an additional three million tonnes would follow, dependent on Russian refinery capacity.
Ukraine's President Volodymyr Zelensky condemned the deal as a gift to Vladimir Putin that funds Russia's war effort. He called it "an investment in a war that must be ended, not prolonged." The EU's foreign affairs chief Kaja Kallas said the sanctions suspension "provides Moscow with more revenues to wage war." The UK government reiterated its commitment to maintaining pressure on Russia through sanctions.
Putin confirmed Russia's willingness to supply both the US and global markets with oil and petroleum products but did not specify quantities in his statement. Kirill Dmitriev, a Putin envoy, said the arrangement would benefit the world.
Analysts questioned whether the deal would meaningfully lower fuel prices for American consumers. Tim Armitage, an investment strategist at Quilter Cheviot, said Trump's first tranche equated to approximately 2.25 million barrels, while daily US consumption stands at around 3.8 million barrels. He called it a "slightly desperate move" by Trump to lower inflation ahead of the midterm elections.
The average US diesel price currently sits at $6.28 per gallon according to the AAA, down from a record high of $6.53 in late September. The global crude oil benchmark Brent crude remained above $103 per barrel.
Russia has faced severe fuel shortages this year due to Ukrainian drone strikes on its refineries, with diesel production falling nearly 30 percent according to International Energy Agency estimates. Trump has blamed those strikes for rising fuel prices. Zelensky defended the attacks as responses to Russia's campaign against Ukraine's energy infrastructure.
The deal contradicts legislation Congress recently enacted and the president signed, which authorizes new sanctions and tariffs on nations importing Russian oil and gas.