Source : INDIA TODAY NEWS
US President Donald Trump said on Friday that Russia had agreed to immediately supply more than 300,000 metric tons of diesel to the United States and global markets, as his administration seeks to ease soaring fuel prices ahead of the November 3 midterm elections.
Trump announced the agreement after what he described as a “highly successful” conversation with Russian President Vladimir Putin. He, in a social media post on Truth Social, said Moscow would provide another 500,000 metric tons in November, followed by a further 1 million metric tons “immediately thereafter”.
advertisement
Ukrainian President Volodymyr Zelensky criticised the arrangement, calling it “an investment in a war that must be ended, not prolonged”. He argued that allowing Moscow to sell petroleum products would give Russia additional funds to sustain its war against Ukraine.
The agreement was announced as a Ukrainian delegation was in the US for discussions on efforts to resolve the conflict with Russia, which began its full-scale invasion of Ukraine in February 2022.
“Gifts to Putin will not bring peace or any benefit to the civilised world,” Zelensky wrote on X.
“Russia will ‘repay’ the diesel with further terror and perfidy,” he added, calling for genuine de-escalation on a reciprocal basis.
Speaking to reporters later on WhatsApp, Zelensky said the arrangement would provide Moscow with additional resources to continue the war and undermine efforts to reach a settlement.
“I believe our team is simply being used as a front. And that is certainly not fair, nor is it how partners should treat each other,” he said, describing the agreement as “a weak decision on the part of strong partners”.
TRUMP SAYS LOWER FUEL PRICES ARE PRIORITY
Trump said the Russian supplies would help bring down fuel costs for American consumers, particularly farmers, ranchers and truckers, as diesel prices remain elevated.
“Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority,” he wrote on social media.
The US Treasury Department issued a general licence on Friday permitting imports of Russian diesel until April 7. The move comes despite Washington’s sanctions on Russian energy companies over the war in Ukraine.
Kirill Dmitriev, an envoy for Putin, also welcomed US-Russia cooperation on diesel and energy in a post on X following the leaders’ conversation.
The initial 300,000 metric tons of diesel would amount to approximately 2.25 million barrels, while the US exports around 1.5 million barrels of diesel each day.
ANALYSTS QUESTION IMPACT ON DIESEL PRICES
Analysts cautioned that the proposed Russian supplies were unlikely to bring about a substantial or sustained reduction in fuel prices.
“I cannot overstate how much of a nothing burger this is,” oil market researcher Rory Johnston, founder of CommodityContext.com, said on X. He noted that Russia typically exports significantly more diesel when its refineries are not under attack.
Jim Mitchell, an analyst at consultancy Wood Mackenzie, said the arrangement could provide some additional supply to a market already facing tight conditions.
“It’s clearly not a fix, but another stream to aid a very tight diesel market,” Mitchell said.
US diesel prices have climbed around 70% since the United States and Israel launched their war against Iran on February 28. The conflict, alongside the war in Ukraine, has intensified pressure on global fuel supplies.
The average US diesel price reached $6.28 per gallon on Thursday, according to motoring group AAA. Prices have risen despite recent efforts by Trump to increase availability, including pressing allies to release emergency reserves and expanding access to tax-exempt red-dyed diesel, typically used in farm equipment.
Following news of the agreement, US diesel futures fell sharply, trading at $4.64 per gallon, down more than 4.8%.
The administration is also considering further measures to contain domestic fuel costs. Three industry sources told Reuters on Friday that Trump was expected to direct some department heads to explore ways to control diesel prices.
The proposed directive could take the form of a presidential memo, urging officials to address state and local regulations that restrict energy production and consider using the Cold War-era Defense Production Act to boost domestic oil and fuel output.
The law gives the president powers to support manufacturing through government-backed loans and loan guarantees and to prioritise government contracts for essential goods.
The White House has been weighing ways to expand refining capacity as the war with Iran exposes US vulnerability to supply disruptions and price spikes. Refining executives told administration officials last month that improving existing refineries or expanding current facilities would be more practical than building new plants, which could take years to complete.
– Ends
With inputs from Reuters
SOURCE :- TIMES OF INDIA
