Crude Oil drops on Trump's Russian diesel plan
After a call with Russian President Putin, President Donald Trump said on Friday Russia will immediately supply more than 300K tons of diesel to the US and global markets. He put the next shipments at 500K tons in November and 1 million tons after that.
President Trump announced on Friday that Russia would supply over 300,000 tons of diesel to the US and global markets, followed by 500,000 tons in November and 1 million tons afterward. This amounted to roughly 2.2 million barrels, which is just over half a day of US demand for distillate fuels. The Treasury granted an extension to General License 135, allowing Russian diesel sales and imports into the US until April 7, 2027.
This is the second diesel-related move by Trump in a week, following the EU's agreement to release French diesel stockpiles. WTI futures declined close to $4.67 a gallon after falling again on the post, with most of Thursday's rise regained. This price difference is significant, as it is around $196 per barrel compared to WTI near $90.50, a margin exceeding $100.
Russian shipments compete with diesel, and a smaller margin makes refiners less inclined to pay for WTI. WTI, or West Texas Intermediate, is a high-quality oil sourced from the United States and distributed via the Cushing hub. Its price is influenced by supply and demand, political instability, wars, sanctions, OPEC decisions, and the US Dollar value. WTI is a benchmark for the Oil market, and its price is frequently quoted in the media.
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