Trump's diesel deal with Russia is unlikely to significantly lower global fuel prices despite expectations of rapid relief
As the world's largest diesel exporter, the US benefits from high prices. At home, however, consumers are feeling the strain of rising living costs. Why Donald Trump's deal with Russia is unlikely to change that.
Despite President Trump's announcement of a temporary suspension of sanctions on Russia and plans to import Russian diesel, diesel prices worldwide are unlikely to see a significant decrease anytime soon. Foreign trade expert Samina Sultan from the German Economic Institute (IW) in Cologne attributes the high diesel prices to the war in Iran and disruption of shipping through the Strait of Hormuz and the Bab al-Mandeb Strait.
The deal with Russia also has a geopolitical dimension, as it intertwines the wars in Ukraine and Iran. Carsten Fritsch, a commodities analyst at Commerzbank, agrees that if the wars in Ukraine and the Middle East continue, resolving supply bottlenecks remains challenging. Russia is no longer the world's largest diesel exporter, with the US taking the top spot.
However, even if Russia supplied large volumes of cheap diesel to global markets, it would not reduce prices as drastically as they rose. Experts calculate that the promised shipment of 2.2 million barrels from Russia would not cover a single day's US diesel demand of approximately 4 million barrels, even if all announced volumes were combined.
Written by urgent.news from DW News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
Also reported by 3 other outlets
- Trump's diesel deal 'legitimizes Moscow' while it bombs Ukraine, Italy's Meloni says kyivindependent.com
- Mike Pence group urges Trump to reverse Russia diesel plan thehill.com
- Trump's diesel deal with Russia is unlikely to significantly lower global fuel prices despite expectations of rapid relief dw.com
