Analysts doubt Trump's Russian diesel deal will bring significant price relief
In short
Energy analysts say President Donald Trump's deal for Russian diesel is unlikely to significantly lower U.S. fuel prices before the November midterm elections. The White House disputed that assessment, saying additional diesel on global markets would lower costs.
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Energy analysts questioned whether President Donald Trump's agreement for Russian diesel would provide significant relief from high U.S. fuel prices before the November midterm elections. The Guardian and CNBC reported doubts about the deal's price impact, while analysts who spoke to Newsweek said it was unlikely to deliver substantial relief before the November 3 vote. The White House disputed that assessment. [ 1 , 2 , 4 ]
Trump announced that Russia would release 300,000 tonnes of diesel immediately to U.S. and global markets, followed by 500,000 tonnes in November and another 1 million tonnes afterward. CNBC reported that Trump said Moscow would then deliver a further 3 million tonnes, depending on the condition of Russia's refineries. The Guardian calculated that the initial 300,000 tonnes amounted to about three-quarters of one day's U.S. consumption, using U.S. Energy Information Administration figures. [ 1 , 2 ]
Patrick De Haan, head of petroleum analysis at GasBuddy, told Newsweek that the promised volumes appeared too small to substantially change market conditions. He said he did not expect the agreement to meaningfully affect U.S. diesel prices. Any slight decreases would depend on the deal actually happening, he said, adding that Russia might not have enough diesel to supply the promised amounts. The Guardian also reported analysts' concerns about the time needed for shipments to reach the United States. [ 1 , 4 ]
A White House official told Newsweek on Monday that adding hundreds of thousands of tonnes of diesel to global markets would lower prices. The official said the Treasury Department had issued an OFAC license allowing Russia to begin selling diesel to the United States and other markets immediately. The official said the additional supply would help reduce costs for American farmers, truckers and workers. [ 4 ]
Trump had promised fast, record diesel-price reductions in his Friday announcement. The Guardian reported that U.S. diesel prices had risen almost 70% since the start of the Iran war, to about $6.30 a gallon, citing the American Automobile Association. CNBC placed the agreement in the context of Trump's efforts to curb inflation before November's congressional elections. [ 1 , 2 , 4 ]
Why it matters
Trump said the deal would reduce diesel costs for American farmers, ranchers and truckers. Analysts cited the promised supply's size, delivery time and uncertainty over Russia's available diesel as reasons to doubt substantial relief.
Key facts
- Trump announced a deal for Russia to release 300,000 tonnes of diesel immediately, followed by 500,000 tonnes in November and 1 million tonnes afterward. [ 1 , 2 ]
- Analysts told Newsweek the deal was unlikely to bring significant price relief before the November 3 midterm elections. [ 4 ]
- A White House official told Newsweek that additional diesel supply would lower prices. [ 4 ]
- GasBuddy analyst Patrick De Haan said the promised volumes appeared too small to substantially change market conditions. [ 4 ]
- The Guardian reported that shipping time and the size of the supplies would limit their effect on current diesel prices. [ 1 ]
Confirmed by several sources
- Trump announced Russian diesel supplies beginning with 300,000 tonnes immediately, followed by 500,000 tonnes in November and 1 million tonnes afterward. [ 1 , 2 ]
- Analysts questioned whether the Russian diesel agreement would significantly lower U.S. prices. [ 1 , 2 , 3 , 4 ]
- Trump said the agreement would bring fast diesel-price reductions. [ 1 , 4 ]
Still unclear
- How much the agreement will lower diesel prices before the midterm elections. Analysts predict limited relief, while a White House official told Newsweek that additional supply would lower prices.
- Whether Russia can supply all the promised diesel. De Haan told Newsweek Russia might not have enough diesel; CNBC reports that an additional 3 million tonnes would depend on refinery conditions.
What local media are saying
Timeline, local time
- The Guardian reported analysts' warnings that the diesel agreement would have little meaningful price impact. [ 1 ]
- The Hill reported De Haan's skepticism about the deal's ability to lower fuel prices. [ 3 ]
- Newsweek reported analysts' doubts about relief before the elections and the White House's response. [ 4 ]