US President Donald Trump has stepped up his efforts to lower US diesel prices by lifting sanctions on Russian diesel exports and announcing a ceasefire on energy infrastructure between Russia and Ukraine. Soaring US diesel prices are hurting US truckers and farmers, and are a concern for voters and political parties ahead of November 3 midterm elections.
US prices were down 0.5% on Monday following Trump’s announcements.
Trump said on Friday that Russia will immediately supply more than 300,000 metric tonnes (2.25mn barrels) of diesel to US and global markets. That is less than a day’s supply for the US transport sector alone, according to US Energy Information Administration data, which shows daily use of around 2.94mn barrels per day. Trump said Russia would supply another 500,000 tonnes in November and a further 1mn tonnes “immediately thereafter”, which is less than four days’ demand for US transport.
The US has lifted sanctions on Russian diesel exports, but it remains unclear what tankers could be used to export the fuel given sanctions on many, and what the condition is of Russian refineries given recent Ukrainian attacks on them. Russia was capable of exporting about 100,000 tonnes of diesel per day prior to Ukrainian drone attacks on refineries that began in 2024.
In light of damage to its refineries, Russia banned diesel exports from July to meet domestic demand and extended that ban to countries without bilateral agreements until October 31, while sustaining steady exports to “friendly” states, mostly in Central Asia. If Ukraine halts attacks on Russian refineries, Russia would be capable of meeting the initial request from Trump for 300,000 tonnes of diesel exports, according to industry sources. Russia could produce 300,000 tonnes of diesel this month if a large oil refinery hit by drones in the European part of the country were to restart, the sources said.
According to Russian President Vladimir Putin, Ukrainian strikes on oil refineries cost Russia’s economy 1% of gross domestic product, which is around $26.6bn, according to Reuters calculations. Exports of 300,000 tonnes of diesel would fetch roughly $400mn, of which a small portion would go to Russia’s state budget. Russia taxes mostly oil output, not oil and fuel exports.
Russia has around 30 large oil refineries, while none are functioning in Ukraine. Moscow said on Saturday it had partially lifted the ban on diesel exports in place since July with immediate effect. Ukraine’s President Volodymyr Zelenskiy said Trump’s diesel supply deal with Russia would embolden Moscow’s attacks on Ukraine and cost more lives.
US lawmakers also criticised the move, including one of Trump’s fellow Republicans, Representative Don Bacon, who said it was time to apply more sanctions that Congress had recently passed, not lift them. British Prime Minister Andy Burnham said his country would strengthen its sanctions on Russia. German Foreign Minister Johann Wadephul restated Berlin’s support for Ukraine’s leader after Trump called for his removal, and called for more pressure to be put on Russia to resume peace talks.
The Group of Seven nations agreed recently to release fuel from their strategic reserves, coordinated by the International Energy Agency. The 32-nation IEA coordinated the world’s largest emergency stocks release in March of over 400mn barrels of crude oil and products, and has recently prodded participating countries to offer any unreleased volumes to market.