Energy policy experts say a trade arrangement calling on Russia to send additional diesel fuel to the United States over the coming months is not expected to bring meaningful relief to consumers facing elevated prices at the pump or in other markets.
On Friday, an agreement with Russian President Vladimir Putin was announced by President Donald Trump, under which more than 300,000 tons of diesel would be delivered to the United States without delay. An additional 500,000 tons was scheduled for November, with a further 4 million tons to follow at an unspecified later date.
The agreement represents a shift away from the import restrictions the United States had maintained on Russian oil since the outset of hostilities between Russia and Ukraine, and arrives at a point when households and the broader economy face pressure from oil prices climbing across world markets amid an ongoing military conflict between the United States and Iran that has now stretched to eight months.
Diesel costs have climbed to their highest recorded levels over the past several weeks, pushing up prices across a wide range of everyday goods. Data from motor club AAA placed the nationwide per-gallon diesel price at $6.53 on September 22, a figure that had not been reached before. The price per gallon had climbed to just under $6.28 by Friday, compared with a figure that had hovered near $3.68 at the same point twelve months earlier. Across Europe, diesel costs have reached their highest recorded levels.
When diesel fuel costs climb, the freight charges attached to a broad range of everyday products tend to rise along with them. Freight and delivery networks rely heavily on diesel as their primary fuel source. Fees tacked onto online purchases and mailed packages have been one way a portion of businesses have transferred their elevated costs to buyers.
Food prices, particularly at the supermarket, are drawing attention as costs on many everyday items climb. Foods that spoil quickly — meat and fresh produce among them — depend on diesel-powered transport for regular deliveries and, in many cases, on fuel-driven farm machinery for the harvest itself, making them particularly exposed to swings in fuel costs.
An AP-NORC poll published last week placed the president's economic approval numbers at their lowest recorded point, a decline that coincided with rising domestic prices for oil and other goods tied to the conflict with Iran and ongoing trade disputes.
Two energy policy analysts offered contrasting assessments on Friday of what a renewed flow of Russian diesel onto world markets would actually mean for prices. Michael Lynch, a fellow at the Energy Policy Research Foundation, contended that existing Russian buyers would be rerouted to other suppliers, leaving any net price movement negligible and any relief in areas such as the New York-New Jersey corridor or Philadelphia amounting to little more than a modest dip. Daniel Sternoff, a senior fellow at the Columbia Center on Global Energy Policy, took the view that restoring those exports — suspended in July after Ukrainian drone strikes knocked out capacity at Russian refineries — could at least provide some stabilizing force on global diesel prices.
Refined petroleum prices are forecast to hold well above their prewar baselines, a situation shaped in part by the near-isolation of Middle Eastern refining capacity from international trade routes following disruptions in the Strait of Hormuz tied to the United States-Iran conflict. Sternoff put the resulting shortfall at roughly half of prewar volumes for products such as diesel. Clayton Seigle, an energy strategist at the Center for Strategic and International Studies, assessed that any additional Russian diesel flowing into world markets through a potential Trump-Putin arrangement would deliver limited relief to consumers at fuel retailers, with the arrangement's principal financial gains accruing to Russia rather than to American buyers.
Seigle noted that Russia's aim appeared to be exchanging summer-grade diesel stocks for the heavier winter and arctic grades needed in the months ahead, while adding that the move was unlikely to bring prices down in the United States or Europe in any meaningful way, though it would ease the revenue pressure on Moscow.
