On Oct. 9, in a phone call with President Putin, U.S. President Trump announced that they had agreed that Russia would supply diesel to the U.S. and world markets. Reuters reported that 300,000 tonnes would be supplied right away, and CBS reported that several million tonnes more would follow over the coming months. Russia has banned diesel exports since July, and Jiji Press reported that the lifting of the embargo would begin immediately. The Asahi Shimbun reported that the United States had temporarily eased its sanctions on Russia. Trump said, “I want to sincerely thank Putin,” and the background is said to be persistently high diesel prices and the Nov. 3 U.S. midterm elections. An aide at the Kremlin said the call was “very friendly.” President Zelensky denounced it as an “investment in the war,” and on the 10th at least 12 people died in an attack on Zaporizhzhia. The German government said it would keep its sanctions on Russia, and an EU spokesperson said the EU would reduce its dependence on Russia.
U.S. domestic politics, aimed at lowering fuel prices, has shown up in diplomacy in a form that weakens pressure on Russia. It runs counter to Ukraine's strategy of attacking refineries to cut into Russia's revenue. The mismatch between Europe, which keeps its sanctions, and the United States, which eases them, will also affect the course of ceasefire negotiations.
Japan relies on imports for most of its crude oil. U.S. price measures could, through international crude and diesel markets, reach domestic prices after a time lag. However, The Washington Post has pointed out that the volume is small compared with U.S. demand, so prices at the pump will not necessarily move right away.
With fuel prices rising, it is a realistic move to increase supply and hold prices down. The judgment that it wants to ease household burdens before the election is also understandable.
It raises the income of a country that keeps waging war and weakens the effect of sanctions. There is criticism that easing them while attacks on Ukrainians continue breaks international coordination.
Today's number is “300,000 tonnes.” The president's account carries a lot of weight, but it is small next to U.S. demand. There are three things to watch: the start of actual shipments, whether the Russian side confirms the same volume, and how far Europe keeps its sanctions on Russia. We want to watch, together with the oil market from Monday on, whether an agreement that began as a pre-election price measure becomes a bargaining chip in the Ukraine war negotiations.
Reuters · CBS · NBC · Asahi Shimbun · Jiji Press · Mainichi Shimbun · Yomiuri Shimbun · AP · The Japan Times · NU.nl · ANSA (Oct. 9–10. Quantities from Reuters and CBS, sanctions easing from the Asahi Shimbun, criticism and attacks from Reuters and the Mainichi Shimbun)
Trump Announces Russia to Supply Over 300,000 Tonnes of Diesel Immediately; U.S. Temporarily Eases Sanctions on Russia, Zelensky Pushes Back
Buying fuel that has grown more expensive from a country that is still waging war. Ukraine and Europe pushed back at the U.S. president's decision, saying it would “fund the war.”
On the 9th, in a phone call with Russian President Putin, U.S. President Donald Trump announced that they had agreed that Russia would supply diesel to the U.S. and world markets. It will release more than 300,000 tonnes right away and several million tonnes more over the coming months, he said (Reuters, CBS, NBC). Russia has banned diesel exports since July, but Jiji Press reported that the lifting of the embargo would begin immediately. The Asahi Shimbun reported that the United States had temporarily eased its sanctions on Russia. Trump said, “I want to sincerely thank Putin” (Yomiuri Shimbun), and the background is said to be persistently high diesel prices and the Nov. 3 midterm elections (Mainichi Shimbun, The Japan Times). The U.S. average diesel price is above $6 a gallon, near a record high, and the thinning of crude passing through the Strait of Hormuz because of the war with Iran is also cited as a factor in the shortage (AP). Putin said it would “have a positive effect on the world economy,” the Mainichi Shimbun reported. An aide at the Kremlin said the call was “very friendly” and that neither side tried to hang up first (Reuters).
Ukrainian President Zelensky denounced the agreement as an “investment in the war” and criticized the easing of sanctions as “weakness” (Mainichi Shimbun, Jiji Press, Reuters). Zelensky said that attacks across Ukraine had killed 78 people over two days (Mainichi Shimbun). On the 10th, Zaporizhzhia was attacked and at least 12 people died (Reuters). The German government said it would keep its sanctions on Russia, and an EU spokesperson said the policy of reducing dependence on Russia would not change (Reuters, ANSA). Many are cautious about any effect in lowering prices. The U.S. daily The Washington Post pointed out that the volume is small compared with U.S. demand and runs counter to Ukraine's efforts to pressure Russia by attacking refineries, and Germany's FAZ also sees the impact as limited. WTI crude closed on Friday at $91.85 (+0.39%). The same day, delegations from the United States, Ukraine and Europe held talks in Miami, Florida (Reuters, Jiji Press). The Kremlin explained that Putin had been cautious about an early resumption of talks with Ukraine (Reuters). In the United States, criticism came from both Democrats and Republicans (NU.nl). The focus from here is when actual shipments begin and whether the Russian side confirms the volumes.