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To combat high fuel prices ahead of the Nov. 3 midterm elections, President Donald Trump announced on Friday that Russia will add hundreds of thousands of tons of diesel to the markets of America and around the world. The fuel will be supplied temporarily under a special license from the US Treasury Department. The arrangement was agreed upon by Trump in a phone call with Russian President Vladimir Putin, and it is the first tangible result of a track of diplomacy that has been reported by CDM over the past few weeks.
"It was agreed that Russia will immediately supply over 300,000 Tons of Diesel Fuel to the American and Global Marketplace, another 500,000 Tons during the month of November, and 1,000,000 Tons immediately thereafter," President Trump wrote on Truth Social as reported by Newsweek. "Diesel Prices for Americans and, indeed, the World, will be COMING DOWN, IN RECORD NUMBERS, AND FAST!"
The U.S. Treasury Department issued Russia-related General License 135 on Friday. According to Newsweek, General License 135 authorizes the "sale, delivery, offloading, and importation" of "diesel fuel of Russian Federation origin" for a temporary period of time at the direction of the President. As the BBC explained, while the waiver allows the sale of the diesel for a time, other Russian assets in the U.S., including funds held in bank accounts, remain frozen. That makes it a limited waiver aimed at one product, not a broad lifting of sanctions. The General License is in place until April 7, 2027. Putin said Russia confirmed its "willingness to supply oil and petroleum products to the US market and global markets at large," according to the BBC. His envoy Kirill Dmitriev added that "Russia-US co-operation on diesel and energy will benefit the world," the BBC reported.
America runs on diesel, so CDM will be keeping an eye on the national average, currently sitting at $6.28 per gallon (AAA) down from a record high of $6.53 per gallon at the end of September, the BBC reported. Diesel is used to fuel trucks that travel to supply grocery stores, to power farm equipment to harvest crops, and to move freight across the country to prevent prices from increasing even further. Brent crude is currently trading at over $103 per barrel, compared with about $73 per barrel before the war with Iran began. Every penny of relief will be felt.
This is a CDM breaking story that we reported on Sept 13, the White House was working behind the scenes to end the war in Ukraine and had told Kyiv to stop hitting Russian energy targets. On Sept 14 Trump wrote that Ukraine and Russia had agreed not to strike each other's energy targets, adding, "The World's Diesel price rise is mostly caused by the Russia/Ukraine War, not Iran." On Oct 3, CDM reported on a New York Times story about how negotiations had taken on a new multibillion-dollar dimension: the sale of Lukoil's international assets to help bring down global energy prices, which the Times said envoys Steve Witkoff and Jared Kushner told Putin they would work on to build goodwill. Friday's diesel deal is the same strategy moving from talk to cargoes: more fuel on the market and lower prices at home, building an economic relationship to help bring down fuel prices.
However, the amount of fuel supplied by Russia within this time frame will be modest compared to the needs of the American market. Trump said another 3 million tons could follow, depending on the condition of Russian refineries. The first tranche of 300,000 Tons (approx. 2.25m bbls) of fuel is the start of a larger supply path, followed by 500,000 Tons in November and 1m Tons after that. As reported by the BBC, the amount of fuel that can be supplied will depend on the conditions at the Russian refineries that have been hit by Ukrainian attacks. According to the International Energy Agency, Russia's diesel production has fallen by nearly 30% as a result of the strikes. The administration has also pushed the G7 to release 100m bbls of oil and diesel from stockpiles. Furthermore, the president this week signed an executive order that allows tax-exempt dyed diesel to be used on highways, according to the BBC.
But the announcement has already been met with strong opposition, particularly from Ukrainian President Volodymyr Zelensky, who called it a "gift to Putin" and wrote that "allowing Russia to sell petroleum products is an investment in a war that must be ended, not prolonged." Others, including Rep. Don Bacon (R-NE), have simply said that "buying Russian fuel is the wrong answer." But Zelensky's position - and that of his military - is that they will continue to attack Russian refineries until Russia stops attacking energy facilities in Ukraine. For Trump, however, that is a problem that can be solved with lower prices at the pump, and continued negotiations with Putin.
The president took questions from reporters at the White House after the announcement and he defended the diesel deal with Russia, calling it "a big deal," and "massive amounts of oil." "I want to thank President Putin to be honest with you," he added. The oil, which is diesel, "is what we want," the President said, according to Newsweek. The hundreds of thousands of tons of diesel authorized and promised by Russia have not yet arrived as completed imports. But if they do, Americans will see the impact at the pump and on their invoices.
