Trump’s diesel deal irks allies, prices unlikely to fall


US President Donald Trump. — Bloomberg

WASHINGTON: President Donald Trump’s deal for Russian diesel has exposed the United States to legal questions, opening a rift with his Republican allies and European leaders and heightening tensions with Ukraine – all in exchange for an outcome that experts suggest is unlikely to succeed.

Under the agreement – announced late last week – Russian President Vladimir Putin would begin releasing diesel supplies into global markets as part of a US effort to bring down prices from their record highs before the Nov 3 mid-term elections.

Trump has also intensified demands on Ukrainian President Volodymyr Zelenskyy to stop attacking Russian refineries and announced an energy ceasefire between the two sides.

The decisions and the ceasefire are all a bet that lowering fuel prices will be the best way to win more votes next month despite the risk of a backlash from political friends and foes alike.

On Sunday, a bipartisan group of senators argued Trump should “reverse course” on his plan to cut a diesel deal with Russia. 

“The United States should not provide Putin with a financial lifeline while Russia continues to kill Ukrainian civilians,” the senators said in a statement.

The accord also provoked fresh tension with Europe, where officials warned that it would bolster Moscow’s war effort in Ukraine. They said the United States should impose more sanctions instead.

“We would call on the United States to put the sanctions in place so that actually we could finish this war, so that all the effects of these attacks on refineries would not be there,” top European Union diplomat Kaja Kallas told reporters in Luxembourg on Monday.

There’s also the legal challenge. A 2022 law prohibits the United States from buying most Russian energy products.

It’s still not clear how Trump plans to get around that, and some lawmakers, including Senator Roger Wicker, a Mississippi Republican, have already said they don’t expect the deal to go through.

Trump acknowledged Monday neither side had actually committed to stop attacking each other’s energy infrastructure.

“They agreed. You know why? Because I said you agree,” Trump said. “That’s why they agreed – because I said they agreed.”

“I think actually Putin wants to make a deal more than Zelenskyy,” Trump said.

Keith Kellogg, the president’s former envoy to Kyiv, dismissed Trump’s latest disagreement with Zelenskyy as “noise”.

He said he didn’t expect it to escalate to anything similar to their infamous face-to-face argument in the Oval Office in February 2025. 

“The rhetoric will kind of take care of itself,” Kellogg said. “Look at what’s happening on the ground.”

That’s all in exchange for an effort to bring down global diesel prices that have remained stubbornly high, mostly because of the Iran war, which has throttled traffic through the Strait of Hormuz. — Bloomberg

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