Trump says Russia to supply diesel to US and global market

WASHINGTON: President Donald Trump said on Friday ‌that Russia had agreed to immediately supply more than 300,000 tons of diesel to the US and global marketplace in an effort aimed at cutting prices for the fuel ahead of the November midterm elections.

The move comes as prices of diesel, used in agriculture, heating homes and trucking goods, are near record highs ahead of the November 3 congressional ​elections that will determine control of Congress.

Trump said in a post on social media he had a “highly successful” discussion with President ​Vladimir Putin in which they agreed that Russia will immediately supply the diesel.

An envoy for Putin, Kirill Dmitriev, ⁠praised cooperation between Russia and the United States on diesel and energy in a post on X on Friday, shortly after the call.

Trump ​said Russia would supply another 500,000 tons in November, and another 1,000,000 tons “immediately thereafter.” Even more would come after that, Trump said, “based on the condition ​of their diesel refineries” which have been damaged by attacks during Russia’s war on Ukraine.

Also read: Russia extends ban on diesel exports until September 30

The unusual move comes as the US has imposed sanctions on Russia’s energy companies over its war on Ukraine that began in February, 2022. The Treasury Department issued a general license on Friday allowing importation of Russian diesel until April 7 ​next year.

Diesel prices, which can drive inflation, are up 70% since the US-Israeli war with Iran began this year, despite two high-profile recent moves ​by Trump to boost supplies of the fuel: pressuring allies to release emergency reserves and expanding access to tax-exempt red-dyed diesel, which is normally used for farm equipment.

‌The wars ⁠in Iran and Ukraine have triggered an unprecedented global fuel supply crunch, pushing average US diesel prices to $6.28 a gallon on Thursday, according to the AAA motorist organization.

“Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority,” Trump said.

Defense production act

Three industry sources said earlier on Friday that Trump will issue a directive in coming days to some US department heads to find ways to control prices ​of diesel.

The directive, which they ​said could take the form ⁠of a presidential memo, will push officials to find ways to bypass local and state regulations blocking energy production and use the Cold War-era Defense Production Act (DPA) to increase output of oil and fuel.

Also read: US bill on Russian oil tariffs not expected to affect trade talks, Indian government source says

Under the DPA, ​the president has authorities allowing loans, or loan guarantees to expand domestic manufacturing of critical materials and to ​require companies to ⁠prioritize government contracts for essential goods.

The White House has been weighing how to use the DPA to expand refining capacity as the war with Iran exposes a US vulnerability to supply disruptions and price spikes.

Refining executives told administration officials last month that federal money would be better directed toward making refineries ⁠more efficient ​or expanding existing plants rather than financing an entirely new refinery, which would be ​considerably more costly and take years to complete.

Trump also said he expected gasoline prices to fall soon to levels around $1.85 to $1.95, well below Friday’s average price of about $4.37 a ​gallon, according to AAA.