From Dw · · 1m 30s
Trump's Russia Diesel Deal Won't Lower Prices
Trump's Russia diesel deal unlikely to significantly lower global fuel prices despite expectations.
In brief
Trump's Russia diesel deal unlikely to significantly lower global fuel prices despite expectations. Trump's diesel deal with Russia will not meaningfully reduce global diesel prices due to supply bottlenecks and US refinery constraints. Originally reported by Dw.
Global diesel prices rising
Diesel prices on global markets are unlikely to fall significantly anytime soon despite Trump's Russia deal.
Iran and Strait Disruptions
High diesel prices stem from war in Iran and shipping disruptions through the Strait of Hormuz and Bab al-Mandeb.
Refinery Output Declines
Roughly 13.5 million barrels of crude oil flow through the Strait of Hormuz daily, but refined diesel volumes remain at 677,000 barrels per day.
Trump's Diesel Announcement
Trump announced temporary suspension of sanctions on Russia to import Russian diesel, claiming prices would fall rapidly.
“diesel prices for Americans and, indeed, the world, will be COMING DOWN, IN RECORD NUMBERS, AND FAST!”
Russia Confirms Deal
Russia confirmed the diesel arrangement as beneficial for Russia, the US, and global energy markets.
“in the interests of Russia, the United States and global energy markets”
US Diesel Prices Surge
US diesel prices have risen 60% to $6.30 per gallon over the past year, equivalent to $1.66 per liter.
US Becomes Top Diesel Exporter
The US is now the world's biggest diesel exporter with 1.26 million barrels per day, accounting for 15.4% of global exports.
Limited Impact on US Demand
Russia's 2.2 million barrels of diesel would cover only one day of US demand, and 35.8 million barrels would cover nine days.
The bottom line
Trump's diesel deal with Russia will not meaningfully reduce global diesel prices due to supply bottlenecks and US refinery constraints.
