Donald Trump announced a deal with Vladimir Putin on Friday to temporarily lift US sanctions on Russian diesel imports, claiming it would bring down fuel prices that have surged since the US went to war with Iran. The agreement involves 300,000 tonnes of diesel released immediately, followed by 500,000 tonnes in November and 1 million tonnes after that. However, energy analysts say the quantities involved are too small and will take too long to arrive to make any meaningful difference to current prices.
US diesel prices have climbed almost 70 per cent since the Iran war began, reaching about $6.30 a gallon according to the American Automobile Association. In the UK, diesel hit a record £2 a litre earlier in October. Ashley Kelty, an energy analyst at Panmure Liberum, said the first shipment was so small it would have no impact on prices, and the three-week shipping time meant supplies would arrive too late to affect the situation. He added that global supply chain complications could also arise as companies work out which supplies originated from Russia and might breach sanctions elsewhere.
The deal has sparked controversy. Volodymyr Zelenskyy rejected Trump's claim of an energy ceasefire between Russia and Ukraine, calling the agreement a weak decision. Maximilian Hess, founder of political risk consultancy Enmetena Advisory, said the deal's full terms were unlikely to be met because Ukrainian drone strikes have damaged Russian refining capacity.