The one with "Russia is an important agreement: huge quantities are coming. This is a diesel agreement, exactly what we want", said Donald Trump, while Putin said he was "confident that this will have a positive impact on the entire global economy". "It has been agreed - explained the President of the United States - that Russia will immediately supply over 300,000 tons of diesel to the American and global markets, another 500,000 tons in November and 1,000,000 tons immediately after. Furthermore, based on the capacity of their refineries, Russia will deliver, in a short time, an additional 3,000,000 tons of diesel". He added: “Thanks to our control of the Strait of Hormuz and this major announcement about Russian energy, diesel prices for Americans and the world will drop rapidly and by a record amount.”
A few hours earlier, the Kyiv Independent had written that it had learned from Ukrainian and US sources that Russia was asking Washington for at least a partial lifting of sanctions in order to accept a suspension of mutual bombing on energy infrastructures and Black Sea routes. Precisely one of the topics under discussion in Miami, according to American sources cited by AFP. And, simultaneously with Trump's announcement, the Treasury announced that it had granted a suspension of US sanctions on the supply of Russian diesel to world markets for the next six months.
However, the agreement does not entirely convince energy sector analysts, according to whom the agreement is unlikely to significantly reduce diesel prices. Tim Armitage, investment strategist at Quilter Cheviot, told the BBC that the figures mentioned by Trump are "relatively low": the first tranche is about 2.25 million barrels and daily consumption in the United States was around 3.8 million barrels, "so it won't make a material difference to prices in the United States." "Of course, there will be two more tranches - added Armitage -, but it seems like a somewhat desperate move by President Trump to try to reduce inflation in view of the midterm elections".
“We're talking about, perhaps, a 5-6% increase in supply between now and the end of the year,” Dan Pickering, chief investment officer at Pickering Energy Partners, told CNN. “Ultimately, it's useful but it won't fundamentally change global diesel markets,” Pickering said. “Parenthetically, there's a reason why Trump talked about volumes in tonnes rather than barrels. The number in tonnes seems higher to the general observer. It's more about politics than a real turning point.” And also for Gregory Brew, analyst at Eurasia Group, "Assuming that Putin keeps his promise, which would mean lifting the diesel export ban that has been in force for several months, it would only be a palliative, nothing more." Ultimately, notes Rebecca Babin, an analyst at investment firm CIBC, speaking to Bloomberg, "these barrels might help, but they might never come to market, and what does come might be too little too late."
Among the points to be clarified is the state of Russian refineries. Before the Ukrainian offensive against the factories, Moscow - reports the Wall Street Journal - produced between 85 and 90 million tons of diesel per year, with internal consumption of less than two thirds. Since then, six refineries representing about half of Russia's diesel production capacity have been hit by Ukrainian attacks. Russia, CNN recalls, banned diesel exports in early July after Ukrainian drone attacks on its refineries caused widespread fuel shortages in the country. The stop took about 800,000 barrels a day from the world market, at a time when supplies were already limited due to the United States' war against Iran. Last month the ban was extended, further exacerbating pressures on energy prices. Russia, Edward Fishman, senior researcher at the Council on Foreign Relations, explains to the New York Times, "imposed the export ban because the Ukrainian attacks had reduced the production capacity of its refineries, making it necessary to ration fuel for domestic consumption", and the agreement with Trump "seems to me to be a classic Putin move: empty promises, aimed at fueling further divisions within the transatlantic alliance".
Even according to some former American officials, it is not clear whether Putin actually has the quantity of diesel that Trump said he wanted to buy but in the end, as a former senior State Department official explained to CNN, it no longer matters whether Putin will actually be able to deliver the promised diesel because "he has now obtained the result he wanted": to make Trump believe that he has gained an advantage in view of the elections and potentially create an effect on the markets. For Richard Nephew, former principal deputy coordinator for sanctions policy at the US State Department, in any case "the message that is conveyed and the damage that is done to the broader sanctions regime are very significant".
The supplies promised by Moscow will not have a direct impact on diesel prices in Italy. This is because, first of all, EU countries have not lifted sanctions on the import of Russian oil products. A possible positive effect for our country could come, therefore indirectly, from the consequences of the agreement between Trump and Putin on the international prices of refined products, which are however influenced by many other factors including the still persistent difficulties linked to the Strait of Hormuz.
Returning to the international scenario related to the conflict in Ukraine, President Volodymyr Zelensky declared that Trump made an "unworthy" decision by accepting Russian oil to alleviate supply shortages in the United States. "It is certainly not honest, it is certainly not worthy of our partners and it is, in my opinion, a weak decision. It seems like a birthday present for Putin. It is an absolutely terrible thing."
According to Axios, Trump decided to end the diesel deal with Russia after Zelensky ignored repeated American requests to stop attacks on Russian oil refineries, which were also driving up energy prices in the United States. "Zelensky is misjudging the situation. By continuing to hit refineries, he is compromising" the trust and availability gained by the tycoon in the last six months, an American official explained. During eight hours of talks yesterday in Miami with Ukrainian negotiators, Steve Witkoff and Jared Kushner warned them of the phone call between Trump and Putin and the removal of sanctions on Russian diesel. According to a Ukrainian source, Trump's envoys have also threatened to strip Ukraine of the intelligence it needs to act if it continues to ignore the president's requests. The Americans, however, deny the reconstruction and highlight that Witkoff and Kushner only explained that the attacks were causing problems in the United States.
Trump and the Republican Party are trying to address the concerns of voters who are faced with soaring diesel and gasoline prices. The wars in the Middle East and Ukraine, according to the American Automobile Association (AAA), have dramatically increased diesel costs in the United States: prices have reached an average of $6.28 per gallon (1 gallon equals 3.78 liters) compared to $3.68 a year ago. “And while the surge in fuel prices has affected voters across the country, rising diesel prices have particularly hurt agricultural states, helping fuel Republicans' worries about losing both the House and Senate in November,” notes the Wall Street Journal. However, even within the party there is some concern about the agreement: "While I understand the desire to lower diesel prices, I fear that the lifting of sanctions on Russian oil will only finance the Kremlin's war machine", observed Texas Republican MP Michael McCaul, quoted by the WSJ, reporting the concerns of some members of the House of Representatives.
