Analysts doubt Russian diesel deal will lower US fuel costs

Energy and foreign policy experts have predicted that the agreement between Donald Trump and Vladimir Putin to temporarily lift sanctions on Russian diesel imports will have little meaningful impact on fuel prices in the United States or abroad. The US president announced the deal on Friday, claiming it was essential to reduce soaring fuel costs following his decision to engage in conflict with Iran. However, analysts argue that the volumes involved are insufficient and the logistics too slow to influence current market rates before the upcoming midterm elections.

The package involves the immediate release of 300,000 tonnes of diesel to the American and global marketplace, followed by 500,000 tonnes in November and a further one million tonnes thereafter. According to calculations based on data from the US Energy Information Administration, the initial 300,000 tonnes equates to roughly three-quarters of the daily US consumption. Despite Trump’s assertion on Truth Social that prices would come down fast, particularly for farmers, ranchers and truckers, industry observers describe the timing and quantity as too little and too late to affect the current high prices.

US diesel prices have surged by nearly 70 percent since the start of the Iran war, reaching approximately $6.30 a gallon according to the American Automobile Association. In the United Kingdom, the average price climbed to a record £2 a litre earlier in October and remained just below that mark on Friday. Ashley Kelty, an energy analyst at Panmure Liberum, stated that the first shipment is too small to impact prices. He noted that chartering vessels and transporting the cargo to the US would take about three weeks, placing the arrival near the end of the month and just one week before the midterms.

The US Treasury secretary, Scott Bessent, defended the move on Sunday, saying it was good for the American people and would help bring diesel prices down. However, Kelty warned that the shipments could complicate the global supply chain. Multinational companies would need to determine which supplies originated from Russia to ensure they do not breach sanctions in other jurisdictions, including Europe. The US Treasury suspended sanctions on Russian diesel exports until 7 April as part of the deal, while maintaining other sanctions on Russian products.

The announcement has also strained relations with Ukraine. Volodymyr Zelenskyy described the deal as a weak decision that would encourage Russia to continue attacking Ukraine. Trump subsequently blamed Kyiv’s strikes on Russian energy infrastructure for rising fuel prices, stating that Ukraine needed a new leader. On Sunday, Zelenskyy said he would be ready to stop hitting Russian oil refineries if Russia curbed its attacks on Ukrainian energy infrastructure. Trump later posted that an energy ceasefire was effective immediately, claiming both parties had agreed.

Maximilian Hess, founder of Enmetena Advisory and a fellow at the Foreign Policy Research Institute, said the deal would not have any meaningful domestic or international effect. He argued that the full terms are highly unlikely to be met due to the impact of Ukrainian drone strikes on Russian refining, which have limited diesel output. Hess suggested that the deal’s failure could be used by Putin to blame Ukraine, thereby stoking tensions between Trump and Zelenskyy.