Donald Trump has agreed with Vladimir Putin that Russia will begin deliveries of diesel fuel to the US and world markets. According to the announced parameters, Moscow must immediately send over 300,000 tons, another 500,000 tons in November and 1 million tons immediately after. If there is sufficient production capacity, an additional 3 million tons can be delivered.
Thus, the total volume of the deal could reach 4.8 million tons. For comparison, daily diesel consumption in the US is about 500,000 tons. This means that even the full announced volume would cover approximately nine days of US consumption if all of it were directed to the country.
Revenue for Moscow, but unclear effect on prices
At a market price of around $1,400 per tonne, the sale of 4.8 million tonnes would provide gross revenue of approximately $6.7 billion. That is why the German newspaper Bild describes the deal as a significant financial boon for Russia as Moscow continues its war against Ukraine.
The effect on US fuel prices, however, remains unclear. “I am not sure that this will help much”, said Professor Clemens Fuest, president of the Munich-based ifo institute. According to him, it is also debatable whether Russia can even provide such large quantities of diesel.
“If Russia actually manages to deliver the announced volumes, this deal will strengthen Russia and weaken Ukraine“, said Clemens Fuest.The Bild analysis indicates that many Russian oil refineries have been seriously damaged in Ukrainian strikes. Russia itself is also experiencing fuel shortages, which calls into question the timing and actual volume of deliveries.
Berlin maintains sanctions against Russia
The German government said it had taken Washington's decision for information. Stefan Cornelius, a representative of Chancellor Friedrich Merz, stressed that for Germany and its European partners, sanctions against Russia remain in force and additional restrictive measures are being prepared.
“Support for Ukraine in its defensive war remains unwavering“, Cornelius said.According to him, diplomatic work to find a peaceful solution continues. Against this background, the diesel deal raises the question of whether the pursuit of lower fuel prices will not provide Moscow with new revenues without leading to a change in the war or lasting relief for American consumers.
Sources: unian.net, bild.de, apnews.com