Trump’s Russian Diesel Deal Too Small to Cool US Pump Prices

US President Donald Trump's deal to import Russian diesel is too limited to meaningfully lower prices at the pumps before November's midterm elections, analysts say.

Trump is searching for a way to reduce sky-high diesel prices. His Republican Party is widely expected to lose seats in the Nov. 3 elections. He shocked some in his own party and European leaders with a deal last week to drop sanctions on Russia in exchange for diesel cargoes to address global shortages.

What the deal covers

The first shipment, set for this month, is for around 2.25 million barrels, according to Trump. Moscow has pledged to release around 3.75 million barrels "at this stage." It did not say when they will be sent or when additional shipments might be authorized.

Even at the higher end of the estimate, if every barrel loaded onto a vessel headed for US shores, it would only cover just over a day's worth of US diesel demand.

"Trump is trying to push every lever he can to get this price down," said Joe DeLaura, global energy strategist at Rabobank. But the released product is "too little, too late and there isn't enough to do anything."

Political pressure and prices

Trump is grappling with voter anger over rising diesel prices, which have been exacerbated by his war on Iran. Retail prices are at their highest ever seasonal level this late into the fall, during the crucial crop harvest season.

The Russian deal has heightened tensions with Ukraine and seemingly does little to mitigate the risks for his party amid tight Senate races in agricultural states like Kansas, Iowa and Nebraska.

The White House has announced several measures in an attempt to lower fuel costs. They include loosening regulations around a tax-free red-dyed variant of diesel, tapping the country's oil reserves and waiving a century-old shipping law.

Potentially importing fuel from Russia is the latest effort, and perhaps the most controversial. The decision abandons years of sanctions designed to limit Russia's ability to profit from exports. It drew condemnations from the European Union and US lawmakers.

Russia's last diesel shipment arrived on US shores in March 2022, according to data from the Energy Information Administration and corroborated by Bloomberg and Vortexa shipping data. That was the month after Russian President Vladimir Putin launched a full-scale invasion of Ukraine.

What it means for Nigeria

For Nigerian businesses and consumers, the takeaway is that this deal does not loosen global diesel supply in any material way. Any relief in import costs will have to come from somewhere else.