Russia to supply diesel to US amid fuel crisis; Zelenskyy says deal will prolong Ukraine war

US President Donald Trump has announced that Russia will immediately supply more than 300,000 metric tonnes of diesel to the United States and global markets, as his administration seeks to curb rising fuel prices ahead of the November 3 midterm elections. Ukrainian President Volodymyr Zelenskyy has criticised the proposed arrangement, arguing that it would provide Moscow with additional resources to sustain its war against Ukraine.

Trump announced the agreement following what he described as a “highly successful discussion” with Russian President Vladimir Putin. In a post on Truth Social, Trump said Russia would supply an additional 500,000 metric tonnes in November, followed by another 1 million metric tonnes shortly afterwards.

The announcement comes as global energy markets face supply pressures following the conflict involving the United States, Israel and Iran, which began on February 28, alongside continuing disruptions linked to the Russia-Ukraine war.

US eases restrictions on Russian diesel

The US Treasury Department issued a general licence permitting transactions involving the sale, delivery, offloading and importation of Russian-origin diesel through April 7, 2027.

The authorisation covers activities that would otherwise be prohibited under US sanctions regulations relating to Russia and Ukraine. However, it does not permit debits to accounts maintained by US financial institutions for the Central Bank of Russia, Russia’s National Wealth Fund or its Ministry of Finance.

Trump said the additional supplies would help reduce fuel costs for American consumers, particularly farmers, ranchers and truckers.

Zelenskyy criticises agreement

Zelenskyy described the arrangement as “an investment in a war that must be ended, not prolonged”. In a post on X, he warned that allowing Russia to sell petroleum products would provide funding for its military campaign.

“Gifts to Putin will not bring peace or any benefit to the civilised world,” Zelenskyy wrote, adding that Russia would “repay” the diesel supplies with further aggression.

Speaking later, the Ukrainian president questioned Washington’s approach, saying he believed Ukraine’s delegation was being used as a front while discussions on resolving the conflict continued in the United States.

The agreement was announced as Ukrainian officials were holding discussions in the US on efforts to end the war, which began with Russia’s full-scale invasion of Ukraine in February 2022.

Analysts question impact on prices

Analysts have cautioned that the proposed shipments may offer only limited relief to the tight diesel market. The initial 300,000 metric tonnes would amount to approximately 2.25 million barrels, compared with US diesel exports of around 1.5 million barrels daily.

Jim Mitchell of consultancy Wood Mackenzie said the arrangement could provide an additional supply stream but would not resolve the market’s underlying constraints.

US diesel prices have risen around 70% since the conflict involving the US, Israel and Iran began. The average retail price reached $6.28 per gallon on Thursday, according to AAA.

Following news of the agreement, US diesel futures fell more than 4.8% to $4.64 per gallon. The Trump administration is also considering measures to boost domestic fuel production and contain prices, including potentially invoking the Cold War-era Defense Production Act.

However, analysts remain cautious about whether additional Russian supplies can deliver sustained relief to American consumers.

(With agency inputs)