Trump Says Putin Agreed to Supply Russian Diesel; Treasury Waives Sanctions Through April 2027

Since the U.S. shelved its diesel export ban and the G7 agreed on Oct. 7 to release 100 million barrels, diesel has stayed stuck above $6 a gallon. Now the White House is turning to Moscow.

On Friday, Oct. 9, President Trump said on Truth Social that he had just finished a call with Vladimir Putin. Russia, he wrote, "will immediately supply over 300,000 Tons of Diesel Fuel to the American and Global Marketplace." Another 500,000 tons would follow in November, then 1,000,000 tons "immediately thereafter."

Trump added that "based on the condition of their Diesel Refineries," Russia would then deliver 3,000,000 tons "within a short period of time." If every tranche arrived, the total would be 4.8 million tons.

The sanctions waiver

The Treasury moved the same day. The Office of Foreign Assets Control said it was "immediately issuing a temporary general license to allow the supply of Russian diesel to the global market." The license authorizes the sale, delivery, offloading, or importation of Russian-origin diesel, including into the United States, through 12:01 a.m. EDT on April 7, 2027.

That is a sharp turn from last month, when Trump signed a bill imposing steep tariffs on the biggest buyers of Russian energy. Earlier this year he also eased Russia sanctions temporarily to slow rising oil prices, and NBC News described that effort as largely a failure.

Putin's own statement was thinner than Trump's. He said he told Trump of Russia's "readiness to supply oil and petroleum products to the US and global markets." He gave no start date and no volume. Putin's envoy Kirill Dmitriev welcomed the deal, writing that "Russia-US co-operation on diesel and energy will benefit the world."

The White House has not said what, if anything, the U.S. is giving Russia in return.

Can Russia deliver?

The Kremlin imposed a diesel export ban in July after Ukrainian drone strikes on its refineries. It has since been extended through the end of October. The International Energy Agency estimates Russian diesel production has fallen by nearly 30%.

Trump's own caveat is therefore central. The 3 million tons depends on the state of Russian refineries, and those refineries are being hit. Trump has asked Zelensky to stop. On Sept. 14 he claimed Zelensky and Putin had agreed to stop targeting energy infrastructure, and Zelensky denied it, telling CBS News he would halt strikes on oil and gas targets only if Russia did the same.

Zelensky objects

Zelensky came out against the deal. "Gifts to Putin will not bring peace or any benefit to the civilized world," he wrote. "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."

He also defended the refinery strikes as a response to "Russia's years-long campaign of terror against Ukraine's energy sector." His line: "Ukraine will not set Russian oil refineries on fire if Russia does not destroy our energy infrastructure."

What the volumes mean

Trump says the deal will bring diesel prices down "IN RECORD NUMBERS, AND FAST." He paired it in his post with what he called "TOTAL CONTROL" of the Strait of Hormuz. U.S. forces escort crude through the waterway nightly, though Iran has kept targeting ships, including one earlier Friday.

The numbers are modest next to the market. ZeroHedge calculated that the first 300,000 tons is about 2.2 million barrels. It compared that to U.S. diesel consumption of just over 4 million barrels a day, or roughly half a day. The deal covers the "American and Global Marketplace," so the U.S. figure is only one way to size it. ZeroHedge also reported that WTI crude slipped about a dollar to $91 after the post.

Brent remains above $103 a barrel, against about $73 before the Iran war began in February.

The pump and the politics

AAA puts the national average at $6.28 a gallon. That is up from $5.94 a month ago and $3.68 a year ago, and down from the record $6.53 set Sept. 22. Diesel had never crossed $6 until just before Labor Day weekend.

The pressure is political as well as economic. Trump faces November midterms with Republicans in competitive races in places like Iowa, where farmers are paying the price. Earlier this week he said he was "thinking about" suspending the federal gasoline tax. He also signed an order letting truckers run tax-exempt red-dyed diesel on highways. CNBC reported the order only defers the 24.4-cent-a-gallon tax, leaving open whether truckers could owe it later.

Trump flirted with a diesel export ban last month, then backed off after oil industry and business warnings that it would raise gasoline prices.

Two things will show whether this is a real supply event or a headline. One is whether the Kremlin lets diesel leave when its export ban comes up for renewal at the end of October. The other is whether the first 300,000 tons shows up in tanker data in the weeks before the November vote.