The agreement between US President Donald Trump and Vladimir Putin on the supply of Russian diesel fuel has not yet brought the expected price reduction on the American market. On the contrary, since the announcement of the deal, the average cost of diesel in the US has risen by seven cents - to $6.35 per gallon.
This was reported on October 28 by The Wall Street Journal, citing data from the American Automobile Association (AAA). When Trump announced the agreement on October 9, diesel averaged $6.28 per gallon. Thus, the announced Russian supplies have not yet changed the situation with high fuel prices.
Under the terms of the deal announced by Trump, Russia was to send over 300 thousand tons of diesel to the American and world markets, plus another 500 thousand tons in November, and later an additional million tons. For this purpose, Washington temporarily eased sanctions restrictions on operations with Russian diesel fuel.
The first tanker with Russian diesel has already set sail, but its final destination remains unknown. According to Kpler, the vessel Agioi Fanendes, carrying about 300 thousand barrels of fuel, left the Russian port of Primorsk last week. Initially, the tanker indicated New York as its destination, but later changed it to "for orders", which means no confirmed port of discharge.
Analysts doubt that the agreement can significantly affect prices even after actual deliveries begin. According to WSJ calculations, the announced volumes correspond to slightly more than 100 thousand barrels of diesel per day in October and approximately 125 thousand barrels in November. By comparison, last year Russia exported about 800 thousand barrels of diesel fuel daily.
An additional problem remains the state of the Russian oil refining industry. Due to damage to refineries from Ukrainian attacks and domestic export restrictions, Moscow may not provide the promised supply volumes.
However, according to Reuters, in the second half of October, Russian refineries increased oil processing to about 5 million barrels per day - up 25% compared to the beginning of the month. This occurred after the cessation of regular strikes by Ukrainian drones on Russian refineries. However, the resumption of production alone does not guarantee an increase in diesel exports in the planned volumes.
The main factors of high diesel prices remain the global shortage of petroleum products, supply disruptions from the Middle East, and the reduction of available refining capacities. As of October 28, American diesel cost about 73% more than a year earlier. This increases the costs of transport companies, agricultural producers, and other large fuel consumers.
As previously reported by "Kurs Ukrainy", Trump's deal with Russia drew objections in the US Congress. Lawmakers demand the preservation of financial and transport documents related to the possible import of Russian oil products for further investigation of the legality of the agreement.
Source: The Wall Street Journal, American Automobile Association (AAA), Reuters
