After a phone call with Vladimir Putin, Donald Trump announced on October 9 that Russia would deliver 300,000 tonnes of diesel immediately, another 500,000 in November and one million tonnes after that. It could reach up to three million tonnes. The figures come from Trump; the Kremlin confirmed the agreement, according to Le Monde. The US Treasury Department is easing sanctions on Russian diesel through a general license that, according to the Kyiv Independent and The Hindu, runs until April 2027. According to Reuters, Zelensky called this an “investment in the war”. Reuters also writes that Trump’s earlier steps on diesel supply have not yet lowered prices.
The agreement reverses the line of pressure on Moscow because the high diesel price hurts ahead of the midterm elections. It hands Russia revenue while peace is being negotiated, and it shows how strongly energy prices steer foreign policy.
Diesel and heating oil follow the world market price, but with a delay and not one to one. Anyone who has to order heating oil soon should watch the quotes on Monday. Whether Switzerland will go along with the easing is an open question.
More diesel supply relieves consumers and the economy worldwide; the sanctions can be tightened again if needed.
Anyone who gives Russia revenue prolongs the war. The effect on prices is uncertain, the political price high.
The move is above all a political signal. The volumes are large, but Russian refineries are damaged, and the license is time-limited. Today we are watching three things: whether Moscow backs the deliveries with figures, whether the EU takes a counter-position and whether Switzerland comments on the sanctions. We will look at prices only on Monday, when the markets are open again.
SRF · NZZ · Reuters · AP (Oct. 9/10)
Trump and Putin agree on Russian diesel exports. Zelensky: “An investment in the war”
After a phone call with Putin, Trump announces that Russia will deliver 300,000 tonnes of diesel immediately and significantly more later. In return, Washington eases sanctions. Kyiv protests, and whether prices will fall is an open question.
US President Donald Trump announced a U-turn in Russia policy on Friday after a phone call with Vladimir Putin. On Truth Social he wrote that Russia would deliver 300,000 tonnes of diesel immediately, another 500,000 in November and one million tonnes after that; in total it could reach up to three million. Reuters, AP, SRF, NZZ and Blick report this. The figures come from Trump himself; the Kremlin confirmed the agreement, according to Le Monde, but we have not checked the details. The US Treasury Department is temporarily allowing the sale of Russian diesel on the world market under a general license that, according to the Kyiv Independent and The Hindu, runs until April 2027. Russia had earlier stopped its own diesel exports because Ukrainian drones hit refineries and there was a shortage at home (CBC). Behind the U-turn is the price: the US diesel price stands at $6.23 per gallon, according to the automobile club AAA, and in September it hit a record of $6.52. Trump is under pressure to cut the cost of living ahead of the midterm elections in November. Reuters writes, however, that his earlier steps on diesel supply have not yet pushed prices down.
Ukrainian President Zelensky reacted sharply. According to Reuters, he called it an “investment in the war” when the US allows Russia to sell diesel; SRF reports fierce criticism from Kyiv. The objection: the revenue finances Moscow’s army while peace is being discussed. Axios quotes Zelensky as saying the trade is “not fair and not honest”; ANSA writes that he warns Russia will pay for it with more terror against Ukraine. A market strategist says, according to MarketWatch, that the measure may come “too little, too late”. Trump had earlier billed the announcement as a “big announcement” (Reuters). The Washington Post and Newsweek explicitly link it to the aim of lowering prices before the election. CNBC notes that, given the destroyed refinery capacity, the president has few levers left. Three things matter for Switzerland. First, the price: diesel and heating oil follow the world market, but a quick decline is not certain because processing capacity is tight. Second, sanctions: Switzerland generally adopts the EU’s Russia sanctions. We do not know whether it will react to the easing in Washington; we have no statement from the federal government. Third, the franc: the dollar closed at around 0.83 francs. A strong franc dampens the import price of oil, since it is traded in dollars; taxes and levies at the pump are unaffected. At the same time, the Middle East remains a price driver. After the attack on Riyadh airport, which we reported yesterday, Reuters and AP speak of three dead; the European aviation safety agency EASA is extending its warning for Saudi airspace, according to Reuters. WTI closed on Friday at $91.63 a barrel, up 0.15 percent. Today, over the weekend, we are watching whether Moscow puts figures on the volumes, how Kyiv responds, and whether the futures markets price in lower diesel prices on Monday.