Key Takeaways
On October 9, President Trump announced that Russia agreed to supply diesel to the United States and global markets to lower rising prices.
President Trump said more than 2.25 million barrels will be shipped immediately.
Some believe the deal could lower diesel prices by 10 to 20 cents in the short term, while others wonder whether Russia can deliver the agreed-upon tonnage.
That announcement was followed on October 11 by President Trump announcing that Russia and Ukraine would honor an energy ceasefire; however, strikes on energy infrastructure continue.
President Zelensky posted on X, “It is increasingly evident that Russia is unwilling to accept an energy ceasefire proposed by the United States and intends to continue its terrorist air attacks against our people and communities.”
According to President Trump, Russia and Ukraine have agreed to halt attacks on each other’s energy facilities, after Russia agreed on October 9 to supply diesel to the United States and global markets due to rising prices. Russia is expected to immediately begin shipping diesel to the global market, with the United States temporarily removing sanctions placed on the country over its war with Ukraine. Mr. Trump’s announcement came despite a Russian ban on exporting diesel and was followed by the lifting of U.S. sanctions on Russian diesel exports until April. The U.S. Treasury’s Office of Foreign Assets Control issued Russia a temporary general license to supply diesel to the global market.
President Trump said more than 300,000 metric tons of diesel (2.25 million barrels) will ship immediately. Another 500,000 tons of diesel are expected in November, followed by a million tons in December, to help offset supply lost to the conflicts in Ukraine and Iran. Russia could deliver another 3 million tons of diesel to the global market starting next year, depending on refinery conditions, President Trump said. Some believe the deal could bring down diesel prices by 10 to 20 cents in the short term, while others wonder whether Russia can deliver those totals. Analysts say it will take weeks to ship, and the quantity is too small to affect prices, while the full deal is unlikely to be met given damage to Russian refineries. The amount Russia could supply immediately would be about three-quarters of what the U.S. uses in a day. The United States exports about 1.5 million barrels of diesel per day.
According to the International Energy Agency (IEA), Ukrainian drone strikes on Russian refineries and sanctions on Russian petroleum have impacted the diesel fuel supply worldwide, knocking out nearly a third of Russia’s export capacity. “Russia has historically been the world’s third-largest producer of refined oil products, after the United States and China,” the IEA reported. In the first eight months of this year, a Russian refinery was hit by Ukrainian missiles or drones on average once every three days.
The conflicts in Ukraine and Iran have driven U.S. diesel prices to historic highs, averaging more than $6 per gallon nationwide. Diesel prices are up 70% since the conflict with Iran began on February 28 and since Ukraine has been targeting Russian refineries. The diesel deal with Russia follows President Trump getting the IEA to release emergency oil and diesel reserves and expanding access to tax-exempt red-dyed diesel, which is normally limited for use by farm equipment.
President Trump also said an “energy ceasefire” took effect immediately. According to Ukrainian President Zelensky, Ukraine would be “ready to respect an energy cease-fire if Russia is ready to do the same.” But President Zelenskiy said he was still waiting to see details of the energy ceasefire between Russia and Ukraine that President Trump announced on October 11, which was supposedly “effective immediately.”
On October 11, President Zelensky accused Russia of breaking the ceasefire, saying that “Russia launched a targeted strike” on Ukrainian power and gas structures, including a strike on a joint heating and power plant in Kharkiv, Ukraine’s second-largest city. Over the past week, Zelenskyy said Russian forces have carried out more than 200 strikes on electricity generation and transmission sites in Ukraine, as well as 17 strikes on the country’s gas and oil facilities.
The Russian strike came hours after President Trump wrote on Truth Social that “effective immediately there is an ENERGY CEASEFIRE” between Russia and Ukraine. Trump added, “Both parties have agreed. Do not break it!” President Zelenskyy on Monday, October 12, wrote in a post on X, “Today alone, the Russians have attacked 6 energy facilities in Ukraine.” He also posted, “It is increasingly evident that Russia is unwilling to accept an energy ceasefire proposed by the United States and intends to continue its terrorist air attacks against our people and communities.”
CNBC reports that EU foreign ministers will meet in Luxembourg to discuss the Russia-Ukraine war, among other issues. The EU is set to adopt nearly 1,600 new sanctions listings targeting Russia’s military-industrial complex, in the single largest expansion of the bloc’s sanctions list since Russia started its war.
Conclusion
On October 9, President Trump announced that Russia agreed to supply diesel to the United States and global markets to lower rising prices. According to President Trump, Russia will immediately ship more than 300,000 metric tons of diesel (2.25 million barrels). Some believe the deal could cut diesel prices by 10 to 20 cents in the short term, while others wonder whether Russia can deliver the agreed tonnage. Analysts say it will take weeks to ship, and the quantity is too small to affect prices, while the full deal is unlikely to be met given damage to Russian refineries. Russia would supply about three-quarters of what the United States uses in a day. On October 11, President Trump followed with another announcement, saying Russia and Ukraine would honor an energy ceasefire. However, strikes on energy infrastructure continue.
