AP: Trump strikes deal with Putin to get diesel in sharp reversal of US policy weeks before midterms

Pic.: Oklahoma news leader

President Donald Trump said he has struck a deal to obtain diesel from Russia, a stunning reversal of years of U.S. pressure on Moscow over its war with Ukraine and an attempt to address high fuel prices ahead of the U.S. midterm elections, AP stresses.

Trump said on social media on Friday that he struck the deal with Russian President Vladimir Putin in a phone call in which he was expected to discuss a suspected case of plague in Russia. Instead, Trump announced that Russia will immediately supply more than 300,000 tons of diesel, followed by an additional 500,000 tons in November and 1 million tons “immediately thereafter.” Russia will deliver an additional 3 million tons “within a short period of time” after that, he wrote.

Trump’s shocking announcement was in stark contrast to a sweeping Russia sanctions law he signed last month that aimed at clamping down on the oil and gas revenues that fuel Russia’s war against Ukraine.

Trump’s move casts doubt on the likelihood of the White House imposing new sanctions on Russia, given that the law that passed overwhelmingly by Congress directs the administration to target countries that purchase Russian oil and gas. Lawmakers this week had urged the Trump administration to act quickly to use the tools available to help Ukraine.

Gas prices globally have surged as the war in Iran upends the energy sector. While diesel future prices dipped on the news on Friday, the national average for a gallon of diesel in the U.S. remained high at $6.28, according to AAA, after hitting a record $6.52 on Sept. 22.

Trump did not address the sanctions or Russia’s war but said, “Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority.”

Trump said later as he left the White House for a campaign rally that he was thankful for the deal. “I want to thank President Putin. To be honest with you, we have massive amounts of oil coming into our country, and it’s diesel, which is what we want. So, thank you,” Trump said.

A statement from Putin, released by the Kremlin on Friday, said during their call he and Trump dedicated “significant attention to the prospects of resolving the Ukrainian crisis” and also discussed “the situation around Iran and various aspects of bilateral relations.”

Russia “confirmed its readiness to supply oil and oil products to the American and global markets,” Putin said. “I am confident that this will have a positive impact on the entire global economy.”

Treasury Department moves to ease diesel sanctions for six months

Shortly after Trump made the announcement, the Treasury Department said it was immediately issuing a temporary license allowing Russian diesel to be supplied to the global market.

The license means U.S. sanctions will not apply until April 2027 on deliveries of Russian diesel that has been loaded onto tankers as of Friday.

The extensions underscore how the fallout from the Iran war has boosted Moscow’s ability to profit from its energy exports.

“What does this do to prices? I think probably not much,” said Clayton Seigle, an energy strategist and expert at the Center for Strategic and International Studies.

But, Seigle said the new deal is a “great benefit to Russia and to Putin,” who are currently trying to offload their summer-grade diesel for the heavier winter and arctic grades that they will need in the coming months.

Russia, once a major exporter of diesel, has banned exports since July as it has struggled to meet demand inside the country because of Ukraine’s repeated attacks on Russian oil refineries. The International Energy Agency says Russian diesel output has fallen by about 30%.

Russian Deputy Prime Minister Alexander Novak told state news agency Tass that Russia is “immediately starting to lift restrictions on diesel exports ahead of schedule.” He said Moscow could start supplies to the U.S. this month and Russia’s domestic market will be “fully supplied” with diesel, as well.

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