Trump taps Russia to boost global diesel supplies ahead of midterms. It may be 'too little, too late,' says strategist.

By Myra P. Saefong and Victor Reklaitis

Former U.S. ambassador to Russia under Obama calls Trump's U-turn on Russia 'absolutely deplorable'

The U.S. Treasury Dept. has temporarily lifted sanctions on Russian diesel exports.

The Trump administration took a U-turn on Friday and enlisted Russia to help boost U.S. and global diesel supplies in an effort to lower prices for the fuel ahead of the fast-approaching U.S. midterm elections in November.

President Donald Trump said in a social-media post on Friday that he made a deal with Russian President Vladimir Putin that will lead to Russia supplying more than 300,000 tons of diesel "to the American and Global Marketplace," followed by another 500,000 tons in November and 1 million tons after that.

Additionally, Russia will then deliver, "within a short period of time," 3 million tons of diesel fuel, Trump said.

"The headline may move prices initially, but this is hardly a straightforward solution," said Rebecca Babin, a senior energy trader and managing director at CIBC Private Wealth.

The U.S. is turning to Russian diesel just after tightening sanctions, which shows the difficult tradeoffs involved in securing supply, she told MarketWatch by email.

For context, the proposed 4.8 million metric tons is roughly 36 million barrels, or 400,000 barrels a day over three months - and delivery depends on refinery availability, said Babin. "Those barrels could help, but they may not fully materialize, and what does arrive will likely still be too little, too late."

Trump, who faces criticism about the elevated cost of living as November's midterm elections get closer, said the deal means diesel prices will fall for Americans. Prices for diesel at the pump had climbed to a record high of $6.528 a gallon on Sept. 22, according to AAA.

After Trump's post, the U.S. Treasury Department said it was "immediately issuing a temporary general license to allow the supply of Russian diesel to the global market," with that move coming at the president's direction.

Following the news, Ukrainian President Volodymyr Zelensky said on X: "Gifts to Putin will not bring peace or any benefit to the civilized world."

"Russia will 'repay' the diesel with further terror and perfidy. Allowing Russia to sell petroleum products is an investment in a war that must be ended, not prolonged," said Zelensky.

Russian energy exports have faced major U.S. sanctions since Putin's full-scale invasion of Ukraine began in 2022, and three weeks ago Trump signed into law a new Russia sanctions bill named after the late Republican Sen. Lindsey Graham.

Trump's decision Friday to pause sanctions on Russia drew criticism. A former U.S. ambassador to Russia during the Obama era, Michael McFaul, said the president "not only cut off U.S. military assistance to Ukraine, but he is now providing Putin with new money to build more Russian rockets and drones to kill Ukrainians. Absolutely deplorable."

The White House didn't immediately respond to a request for comment.

Ahead of the news, U.S.-traded West Texas Intermediate (CL.1) and Brent crude futures (BRN00) settled Friday with a gain of 0.4% each. Ultralow-sulfur diesel (HO00), also known as heating oil, fell 3%.

Robert Schroeder contributed.

-Myra P. Saefong -Victor Reklaitis

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10-09-26 1652ET