Trump Announces Deal with Putin to Release Diesel Supplies, Lower U.S. Prices

U.S. President Donald Trump announced on Friday, October 9, that Russia agreed to release millions of tons of diesel into U.S. and global markets, following a phone call with Russian President Vladimir Putin. In parallel, the U.S. Treasury Department issued General License 135, which temporarily authorizes the sale, delivery and import of diesel of Russian origin, including imports into the United States, until April 7, 2027.

According to Trump, Russia would immediately supply more than 300,000 tons of diesel, followed by another 500,000 tons in November and 1,000,000 tons shortly after, with a possible additional 3,000,000 tons depending on the state of Russian refineries, bringing the total to around 4.8 million tons. A Hellenic Shipping News report, citing ING, described a somewhat different timeline: 300,000 tons of immediate exports, 500,000 tons in November, and 1 million tons in December, noting that these initial volumes remain well below the roughly 3 million tons per month that Russia exported in 2025, according to LSEG data.

The announcement comes amid diesel prices near record highs, driven by disruptions to the global oil supply stemming from the war with Iran and Ukrainian strikes on Russian refining infrastructure. Reuters reported that U.S. diesel prices rose nearly 70%, to $6.28 per gallon, ahead of the November 3 midterm elections, which will determine whether Republicans retain their narrow majorities in Congress.

The announcement had an immediate impact on markets: the NYMEX ULSD crack spread against WTI fell $6.45 per barrel on October 9, to $96.80, and middle distillate cracks also lost ground in the following days. Analysts such as Darrell Fletcher of Bannockburn Capital Markets described the move as just another brief, minor patch on a global supply problem that it does not fundamentally solve, while an ING report warned that, despite the downward pressure, it is not enough to ease the tightness in the middle distillate market.

The deal drew bipartisan criticism in the United States. Republican Senator Thom Tillis of North Carolina argued that the agreement could be illegal and would put American lives at risk, referring to the Russia and Iran sanctions law passed in honor of the late Senator Lindsey Graham. Representative Don Bacon of Nebraska called the move morally wrong for propping up Putin's war economy, while former Vice President Mike Pence called it a betrayal of Graham's legacy and urged Trump to reverse it. Treasury Secretary Scott Bessent defended the agreement, stating that it would be enforced with the full extent of available legal authority and that it would benefit Americans by lowering prices.

The Kremlin confirmed that Russian diesel had indeed begun reaching global markets. Its spokesman, Dmitry Peskov, stated that the fuel had started to arrive and that it would have a positive effect on stabilizing oil markets, although it would not be enough to fully stabilize them. According to LSEG data, Russia resumed export loadings from the Baltic port of Primorsk, and a tanker carrying about 40,000 metric tons of ultra-low-sulfur diesel was loaded on October 13 bound for Morocco. Russia also dismissed as "cynical" European criticism of the deal, noting that Europe continues to purchase Russian oil and liquefied natural gas.