How could Trump’s Russian diesel deal affect U.S. prices?

What does the Treasury license change?

The Treasury Department’s Office of Foreign Assets Control issued General License 135 on Friday.

The authorization runs through 12:01 a.m. Eastern daylight time on April 7, 2027. It does not permit debits from accounts at U.S. financial institutions belonging to Russia’s central bank, National Wealth Fund or Ministry of Finance.

The license creates a specific opening for Russian diesel transactions under the regulations it names, rather than a general end to sanctions on Russia. AP reported that the United States had not imported Russian oil or gas since the Biden administration banned those imports in 2022, after Russia invaded Ukraine. The new authorization explicitly covers Russian-origin diesel transactions under the named Treasury rules.

The arrangement also comes weeks after Trump signed a Russia sanctions law that became law on Sept. 18. The sequence puts a targeted opening for diesel trade alongside the administration’s wider effort to pressure Moscow over its war against Ukraine.

Could Russian diesel lower U.S. prices?

Trump framed the arrangement as relief for people facing high fuel costs. In a social media post, he said, “Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority,” in words reported by the AP and carried by PBS News.

Diesel futures fell after the announcement, AP reported, but the average pump price remained $6.28 per gallon that day. A drop in futures does not itself show that farmers, truckers or other U.S. buyers will pay less at the pump.

Clayton Seigle, an energy strategist at the Center for Strategic and International Studies, told AP the arrangement was unlikely to do much to reduce prices and could give Russia a market for diesel it was trying to offload.

Michael Lynch, an analyst at the Energy Policy Research Foundation, said redirecting Russian diesel to the United States could send Russia’s existing customers to other suppliers. “If we get diesel from Russia, basically it means that their existing customers are not going to get it and they’ll have to go somewhere else, and that will keep the price basically where it is now,” Lynch said, in words reported by AP and carried by PBS News.

Lynch’s point is that moving fuel between buyers may not add supply to the market as a whole. Whether the announced volume lowers U.S. prices depends in part on whether it adds fuel to global trade or shifts deliveries away from existing customers.

That distinction matters for the groups Trump named as beneficiaries. A deal measured in tons is not the same as a lower bill for a farm, a trucking business or a household buying goods transported by diesel-powered vehicles.

Who could benefit from the arrangement?

Russia had restricted diesel exports since July as it struggled to meet domestic demand, AP reported. The outlet linked the supply strain to repeated Ukrainian attacks on Russian oil refineries; the International Energy Agency put the decline in Russian diesel output at about 30%.

Russian Deputy Prime Minister Alexander Novak said Russia was beginning to lift export restrictions and that supplies to the United States could start in October, AP reported. The announced U.S. deliveries would therefore come as Russia faces constraints on its domestic fuel supply and lower diesel output.

The Kremlin said Putin had confirmed Russia’s readiness to supply oil and oil products to U.S. and global markets. Russian presidential aide Yuri Ushakov would not say whether the United States had made concessions or what Russia would receive in return, AP reported.

Trump focused his public announcement on fuel prices and did not address Russia’s war against Ukraine or sanctions, AP reported. His envoys were meeting Ukrainian officials in Miami as the announcement was made.

Ukrainian President Volodymyr Zelenskyy called the decision weak and said it could benefit Russia and prolong the war. “I believe our team is simply being used as a smokescreen. And that is certainly not fair. It is certainly not how partners should treat each other,” Zelenskyy said, in words reported by AP and carried by PBS News.

Democratic Sens. Chuck Schumer, Jeanne Shaheen and Elizabeth Warren described the announcement as a betrayal of Ukraine, European allies and U.S. national security, AP reported. Sen. Richard Blumenthal, a co-sponsor of the sanctions law, said the arrangement ran counter to Congress’ intent. Rep. Don Beyer, a senior House Democrat on the Joint Economic Committee, also condemned Trump’s approach to Russia.

The next dated shipments Trump announced are 500,000 tons in November and 1 million tons in December. The additional 3 million tons has no specific delivery date, leaving the schedule—and the prospect of lower prices—to be tested against actual deliveries.