Diesel prices were sharply pressurized before the midterm elections. Trump sought a “rescue” from Russia, but analysts threw cold water: it was worth nothing

The Zhitong Finance App learned that US President Trump said on Friday that Russia has agreed to supply diesel to the US and global markets in order to lower fuel prices before the midterm elections. However, analysts said that this batch of imports is unlikely to significantly improve the US diesel supply.

Trump said in a social media post that Russian President Vladimir Putin agreed to “immediately” launch more than 300,000 tons of diesel in the US and global markets, supply another 500,000 tons in November, then add 1 million tons. He also mentioned that depending on the operation of Russian refineries, Russia will deliver an additional 3 million tons of diesel “within a short period of time.”

Russia measures the amount of diesel in tons, so the first batch of 300,000 tons delivered is equivalent to 2.25 million barrels; as a reference, the US diesel export volume is 1.5 million b/d.

After the first batch is delivered, the amount of 500,000 tons put in will be equivalent to 3.7 million barrels, or 123,000 barrels per day, less than 10% of the daily US export volume.

The US Treasury Department issued an exemption to allow the import of Russian diesel, which was previously sanctioned, until April 7.

Affected by this news, New York Mercantile Exchange (NYMEX) diesel futures continued their previous decline, while crude oil futures reacted lackluster.

“This batch of oil may help a little, but delivery may not be all; even if it does arrive, the quantity may be too small and too late,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. “This news may initially disrupt prices, but it's hardly a straightforward solution.”

“It was essentially a thunderstorm,” said Rory Johnston, an oil market researcher and founder of CommodityContext.com, on X because the amount of diesel to be delivered — if it were to be delivered — was insufficient to bring about a continued decline in prices.

“Due to the poor condition of Russian refineries after being attacked by Ukraine and their own export restrictions, it is unclear how much additional supply the world will actually receive,” said Andy Lipow, president of Lipow Oil Associates.

Earlier this year, Russia suspended diesel exports after Ukraine attacked Russian refineries, and last month, the country's government extended the suspension of diesel exports until October 31.

According to the American Automobile Association, retail diesel prices in the US were around $6.28 per gallon on Friday, having previously reached a record high of $6.52 per gallon on September 22. Although Trump signed an executive order this week aimed at expanding the supply of red-dyed diesel, the retail price of diesel has not declined significantly.

Crude oil futures closed slightly higher on Friday, as Trump's remarks that the US will not attack Iran before the midterm elections were offset by concerns about continued attacks on Middle Eastern shipping and the possible loss of US production due to Hurricane Isaias.