Trump’s Russian Diesel Deal: America Doesn’t Need It, and Europe Pays for It

No, and that is what makes this deal so revealing.

The United States is the world’s largest diesel exporter. It produces roughly 5.2 million barrels of diesel a day and consumes about 3.5 million, which leaves around 1.5 million barrels a day to sell abroad. The latest Energy Information Administration weekly data, for the week to 2 October, show the same picture: about 5.29 million barrels a day of distillate produced, 3.65 million consumed and 1.76 million exported.

A country with a daily surplus of more than a million barrels does not buy diesel from its main strategic rival because it is running short. It buys because pump prices have become a political problem.

The volumes are small, too. Tim Armitage, an investment strategist at Quilter Cheviot, told the BBC that the first tranche equals about 2.25 million barrels, while the US uses around 3.8 million barrels a day, “so it won’t make a material difference to pump prices in the US”. He called the deal “a slightly desperate move by President Trump to try to lower inflation ahead of the midterms”. Even the volume promised for later depends on refineries that Ukrainian drones have been hitting all year. Russia’s diesel output has fallen by nearly 30%, according to the International Energy Agency, and Moscow itself banned diesel exports in July and extended the ban to the end of October.

Nor does the world market hang on a few million tonnes of Russian fuel. Iran has largely closed the Strait of Hormuz since the war began on 28 February, and whenever the Gulf manages to ship a few cargoes of crude, gas or diesel, the region is hit again. Against a shock of that size, Russian tonnage changes little.

Diesel runs the working economy. Most American cars burn gasoline, but the trucks that move goods and the tractors on farms burn diesel. When diesel prices rose worldwide after the Iran war began, they rose in the United States as well. Distributors passed the cost on to farmers, and farmers turned on their members of Congress and on candidates who had no plan to bring prices down.

There was no plan to offer, because a war set these prices and no domestic programme can undo that. The average US diesel price reached a record $6.53 a gallon at the end of September, according to AAA figures cited by the BBC, and still stood at $6.28 when the deal was announced. In September AP reported that Republicans in Iowa and Michigan were calling for an end to diesel exports as prices rattled the party ahead of the vote.

Trump tried that first. In late September Politico reported that the administration had drawn up a plan for a 90-day ban on diesel exports, and Trump said he was thinking about it seriously. Nothing came of it, for two reasons.

The first is storage. Keeping 1.5 million barrels a day at home for 90 days means finding room for well over 100 million barrels, in a market where traders already keep their tanks full to buy and sell. Those tanks do not exist. The Energy Policy Research Foundation warned, as Euronews reported, that Gulf Coast refiners cut off from export markets would see storage fill and would reduce output, pushing prices higher.

The second is trade. American diesel is a large part of Europe’s supply, about a third of the EU’s diesel imports from outside the bloc this year according to Kpler data cited by Euronews, and Europe in turn supplies gasoline to the United States. Ban diesel exports and that exchange breaks. The United States has to export its surplus whether it likes it or not.

With the ban off the table, Trump turned to Moscow. Suppose the deal works and the first barrels arrive within weeks. The Republican Party gains very little at the pump. What it gives up is far larger: with a stroke of the pen, Trump sold out the Europeans and NATO.

The deal looks worse still against what Russia has done in the Iran war.

American media have reported that Russia helped Iran strike US bases in the Middle East. On 16 September CNN reported that 14 Russian spy satellites passed over a US base in Saudi Arabia two days before a devastating Iranian attack on it, citing US officials and international intelligence sources. Surveillance like that is how Iran has been able to hit American positions so accurately.

The cost has been heavy. A Congressional Research Service update dated 5 October counts 81 US military aircraft lost or damaged in the Iran war, nearly double the figure in May. American air power has not taken a blow like this since Vietnam.

British media have asked the obvious question. Why is the president rewarding the government that helped Iran kill and wound his troops and destroy his aircraft? Trump is trading his soldiers’ blood for a cheaper tank of diesel before an election.

Nobody in Washington has explained how the money will reach Moscow.

The United States, Europe and their partners cut Russia’s major banks off from SWIFT, the messaging network banks use to move money across borders, after the 2022 invasion. For four years Washington has worked to deny Moscow dollars. Now it is preparing to hand them over for diesel.

General License 135 keeps one door shut. It does not allow payments out of accounts that Russia’s central bank, National Wealth Fund or finance ministry hold at US banks. Everything else about the payment route is unclear. Will the money move through sanctioned Russian banks, through third countries, in yuan, or in dollars? If it is dollars, Washington is reopening the channel its own sanctions were built to close. The BBC asked the White House what Russia will get in return. The answer should come before the first tanker sails.

When Trump returned to the White House he called the war in Ukraine someone else’s war and scaled back American support for Kyiv. Now he is putting money in the pocket of the side he says he is pressuring.

On 18 September Trump signed the Sanctioning Russia and Iran Act, Senator Lindsey Graham’s law aimed at Russia’s energy and defence industries and at the networks around Putin, Kyiv Post reported. Three weeks later he suspended sanctions on Russian diesel. Senator Richard Blumenthal called the licence “directly contrary to Congress’s intent”. Ukraine’s drone campaign against Russian refineries, which the Financial Times has reported is guided by American intelligence, was one of the few levers that hurt Moscow’s war economy. A US official told Axios that Trump made the deal after Zelensky ignored half a dozen requests to stop hitting those refineries, as we covered here. Washington is now relieving the pressure that its own intelligence helped create.

Putin’s larger prize is in the Middle East. A long Iran war suits Russia. It ties down American forces, keeps the price of Russian oil and fuel high and drives a wedge between Washington and Europe. Every extra dollar Moscow earns can help Iran: satellite imagery, the jet-powered drones Tehran has long wanted, even S-300 or S-400 air defence systems. The longer that war lasts, the louder Europe complains, the deeper NATO divides and the more American forces are drained. This deal tells Putin that Washington can be bought.

Volodymyr Zelensky is in an impossible position. One month Trump sits with him and calls him a great man. The next month he sells him out. The month after, he tells him to keep fighting, and then he sells him out again.

Zelensky called the deal “an investment in a war that must be ended, not prolonged” and called any easing of sanctions without a lasting de-escalation agreement “an obvious weakness”. He told Axios it was “not fair and not honest” and likened it to a birthday present for Putin, who had just turned 74. “Russia will ‘repay’ the diesel with further terror and perfidy,” he wrote, DW reported. The next day he said Russia had “expressed its thanks” by dropping five glide bombs on residential buildings in Zaporizhzhia, where Russian strikes killed 20 people that day, according to CNN.

Trump did not defend the deal. He attacked Zelensky. Leaving the White House for a rally on 10 October, he said Zelensky “wants to make problems for our farmers, our ranchers, with diesel fuel” and that “it’s time for Ukraine to get a new president”, as we reported.

The deal makes one thing plain. When America’s interest and Trump’s interest collide, Trump will sell the world. Here even America’s interest is missing. The deal serves the Republican Party for a few weeks before the ballot, and it fixes nothing in the American fuel market.

Trump knows what is at stake. He has told Republicans that if they lose the midterms, Democrats will “find a reason to impeach me”, Al Jazeera reported. It is October and the vote is on 3 November, so he is trying to undo his mistakes in under a month.

He is too late. Voters have formed their first impressions of the candidates, and no amount of tinkering with fuel markets will change them now. The violence of this reversal, selling out his allies in plain sight, shows that Trump has sensed how weak the Republican Party and its candidates are. Otherwise he would never have taken so reckless a step.

This move has damaged Trump’s standing in Europe more than anything before it. He cut back joint exercises with European forces and began pulling American troops out of Europe, including an order in May to withdraw about 5,000 troops from Germany. He sharply reduced support for Ukraine. He sat Europe’s leaders in front of his desk at the White House like pupils and told them what to do. He humiliated Zelensky in the Oval Office. His administration has meddled in European elections and backed the far right.

Europe’s first impression of Trump was of an unreliable ally who might betray it. Now he is betraying it. The EU’s foreign policy chief, Kaja Kallas, said suspending sanctions on Russian diesel “provides Moscow with more revenues to wage war”, adding: “This is not the time to ease pressure on Russia, and Europe won’t.” EU foreign ministers are preparing their largest sanctions package against Russia since the full-scale invasion, while Washington moves the other way. Trump’s Nord Stream bargain with Putin follows the same pattern.

At home, Trump is regularly accused of being too close to Putin, and this deal will feed that charge. This week The New York Times reported that two of his top political advisers, James Blair and Chris LaCivita, had been paid through a Washington law firm retained by the government of Republika Srpska, the pro-Russian Serb entity in Bosnia. Trump said that if there was a conflict he would fire them “immediately”, CNN reported.