President Donald Trump said Friday that Russia has agreed to send millions of tons of diesel to world markets. The announcement came after a phone call with Russian President Vladimir Putin and as U.S. fuel prices sit near record highs weeks before the midterm elections.
In a Truth Social post, Trump said Russia "will immediately supply over 300,000 Tons of Diesel Fuel to the American and Global Marketplace, another 500,000 Tons during the month of November, and 1,000,000 Tons immediately thereafter."
He added that Russia would then deliver 3,000,000 more tons "based on the condition of their Diesel Refineries."
"Between our TOTAL CONTROL of the Strait of Hormuz, and this great announcement on Russian Energy, Diesel Prices for Americans and, indeed, the World, will be COMING DOWN, IN RECORD NUMBERS, AND FAST!" Trump wrote.
Diesel Futures Drop
Heating oil futures, the benchmark for U.S. diesel, fell 4.33% to $4.67 a gallon Friday afternoon. That's still more than double the 52-week low of $2.05, but below the high of $5.43, according to Trading Economics.
Refiners have made big profits from the diesel shortage, but two Trump posts in two days gave traders reasons to take some of those gains off the table.
On Thursday, Trump said the U.S. "will not be attacking Iran at any time prior to the Midterm Elections to be held in the United States on November 3rd," Benzinga reported. That lowered the risk of new Middle East supply disruptions.
On Friday came the Russian diesel announcement. Shares of PBF Energy Inc.
Pump Prices Still High
Diesel averaged $6.28 a gallon nationally Friday, according to AAA, down from a record $6.53 on Sept. 22 but up from $3.68 a year ago. Supply has been squeezed by the U.S.-Iran conflict around the Strait of Hormuz and by Ukrainian drone strikes on Russian refineries.
The four shipments Trump touted add up to 4.8 million tons. At roughly 7.45 barrels per ton, that is about 36 million barrels. By comparison, the G7 agreed on Oct. 2 to release 100 million barrels of diesel and crude.
Sanctions Reversal
The Associated Press called the deal a "stunning reversal" of years of U.S. pressure on Moscow. Trump signed a sweeping Russia sanctions law just last month.
On Friday, the U.S. Treasury issued a temporary license allowing Russian diesel to be traded in the U.S.
The deal's timing is unclear. On Oct. 1, Putin said Russia would not supply diesel to global markets until sanctions were lifted, Reuters reported. Moscow's ban on diesel exports by producers also runs through Oct. 31.
