By Matt Randolph
The agreement that US President Donald Trump presented as a great success provides that Russia will sell 300.000 tons of diesel to the American and world market in October, another 500.000 tons in November and 1 million. tons in December. Shortly after the announcement, Bradley Smith, director of the Office of Foreign Assets Control (OFAC), signed General License No. 135. The provisional authorisation allows Russian diesel to be imported into the US until 7 April 2027. It may sound like a solution to reducing fuel prices, but it is not.
In short, these quantities are not enough to substantially affect the market, let alone reduce diesel prices internationally or even in the US. According to the International Energy Agency (IEA), global diesel consumption amounts to 855 million. barrels per month, i.e. just under 115 million. metric tons. The 300,000 tonnes forecast for October cover just 11 cents of daily world consumption. In other words, they account for about 5% of U.S. daily exports.
Just as importantly, it makes no difference whether diesel heads to the US or some other market: the effect on prices will be the same — essentially zero. The agreement does not add a new amount of fuel to the global market, but redistributes the existing supply. And as petroleum spirits are priced internationally, shipping them to New York or Beijing doesn't change the picture.
Especially in the diesel market, the situation is already stressed. According to the IEA, by August 2026 production had fallen by 1.6 million tonnes. barrels per day in Russia and the Middle East. At the same time, refining capacity in these two areas had been reduced by 4.2 million. barrels per day. These losses have led to a gradual decline in inventories over the past seven months. In the US alone, inventories have fallen by more than 24 million. barrels and are now 12% below the average of the last five years.
Even with the Russian diesel deal in force, global consumption will still exceed production. This means that the deficit will widen, at a time when demand for diesel is increasing internationally, as autumn and winter approach. Until production exceeds consumption and stocks begin to be replenished, the prospects for a substantial de-escalation of prices remain limited.
Undoubtedly, it is positive that the US president is looking for ways to stop diesel prices. The increased cost of fuel is ultimately passed on to inflation and other sectors of the economy. However, nothing can replace an increase in supply — and this is the only sure way for prices to fall substantially.
It is therefore crucial to understand the true impact of such initiatives so that businesses can plan their moves accordingly. Exaggerated claims that the deal will lead to an unprecedented drop in prices do not help. On the contrary, they mislead businesses that need a reliable picture of the market to make their decisions.
Forbes
