President Trump said Russian President Vladimir Putin has agreed to release some of Russia’s diesel supply into the global market as the U.S. seeks to bring down soaring prices for the critical fuel.
Mr. Trump said on social media that Russia agreed to “immediately supply 300,000 tons of diesel fuel to the American and global marketplace, another 500,000 tons, during the month of November and 1,000,000 tons immediately thereafter.”
He added that, depending upon the condition of Russia’s diesel refineries, Moscow could deliver 3 million tons of diesel “within a short period of time.”
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“Between our total control of the Strait of Hormuz and this great announcement on Russian energy, diesel prices for Americans and, indeed, the world, will be coming down in record numbers and fast,” Mr. Trump said, adding that lower prices for Americans “is my greatest priority.”
Mr. Trump said the Russian release will lower diesel prices for U.S. farmers, ranchers and truckers, who are all key voting blocs ahead of the November midterm elections. The cost of living, including fuel prices, is shaping up as the dominant issue in the midterms.
Since it invaded Ukraine in February 2022, Russia has been slapped with sanctions from the U.S. and the world to curb its profits on the sale of its oil. To get the diesel flowing out of Russia, the Treasury Department announced Friday that it would ease sanctions on Russia through April.
A document posted to the Treasury website said “the sale, delivery, offloading or importation, including the importation into the United States, of diesel fuel of Russian Federation origin are authorized through 12:01 a.m. eastern daylight time, April 7, 2027.”
Diesel prices have soared in recent weeks as supply declines. Ukrainian attacks on Russian energy facilities and the conflict with Iran have hurt the supply of diesel, which hit a record high of $6.53 per gallon last week. The average price of diesel gas on Friday was $6.28 per gallon, per the AAA auto club.
Since the start of the Iran war in late February, the price of diesel fuel has soared almost 70%, causing wide-ranging inflationary effects on the global economy.
Mr. Trump earlier this week expanded sales of red-dyed diesel, a tax-exempt fuel typically used for farming in an effort to bring diesel prices down. The order allowed sale of red-dyed diesel for vehicles that can be operated on public roadways. Because red-dyed diesel is intended for off-road use, it is exempt from taxes applied to diesel fuel sold for highway transportation.
Typically, it is sold for use in farm equipment and other off-road vehicles.
The fuel is almost chemically identical to on-road diesel. The red dye serves as a marker indicating that highway taxes have not been paid.
Prior to Mr. Trump’s order, it was illegal to use red-dyed diesel in vehicles on public roads. Using red-dyed diesel in vehicles on public streets and highways can result in significant penalties because it is considered tax evasion.
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