From The Straits Times · · 1m 30s
Trump's Russia Diesel Deal Fails to Lower Prices
Trump's Russia diesel deal unlikely to cut prices as global supply squeeze persists.
In brief
Trump's Russia diesel deal unlikely to cut prices as global supply squeeze persists. US diesel prices remain above $6 a gallon after Trump's Russia deal, with analysts saying promised volumes too small to ease supply shortages. Originally reported by The Straits Times.
US diesel prices hit record high
US retail diesel prices topped US$6 a gallon in September for the first time ever and have remained above that level since.
Trump's Russia deal unlikely to lower prices
Analysts said the promised volumes are too small to ease the global supply squeeze.
Political risk for Trump
Diesel prices have shot to record highs during the US-Israeli war on Iran, creating a political liability for Trump and his Republican party before the Nov 3 midterm elections.
Russia's export challenges
Russia may struggle to deliver the extra fuel because of weak refining, high freight costs and sanctions.
IEA warns shortages until 2027
The International Energy Agency warned shortages could last until 2027.
Trump's initial shipment plan
Trump said Russia would immediately export 300,000 metric tons, or 2.25 million barrels, followed by 500,000 tons in November and 1 million tons immediately thereafter.
Analysts' supply estimates
Michelle Brouhard, head of policy and geopolitical risk at Kpler, said it would take an additional 400,000 barrels per day of diesel supply to materially ease prices in the current market.
Market impact limited
But the initial shipment of roughly 2.2 million barrels would amount to only about 73,000 bpd if distributed over a month.
In short
US diesel prices remain above $6 a gallon after Trump's Russia deal, with analysts saying promised volumes too small to ease supply shortages.
