Trump says Russia to supply diesel to US and global market

WASHINGTON - President Donald Trump said on Oct 9 that Russia had agreed to immediately supply more than 300,000 tonnes of diesel to the US and global marketplace in an effort aimed at cutting prices for the fuel ahead of the November midterm elections.The move comes as prices of diesel, used in agriculture, heating homes and trucking goods, are near record highs ahead of the Nov 3 congressional elections that will determine control of Congress.Trump said in a post on social media he had a “highly successful” discussion with President Vladimir Putin in which they agreed that Russia will immediately supply the diesel.An envoy for Putin, Kirill Dmitriev, praised cooperation between Russia and the United States on diesel and energy in a post on X on Oct 9, shortly after the call.Trump said Russia would supply another 500,000 tonnes in November, and another 1,000,000 tonnes “immediately thereafter.”Even more would come after that, Trump said, “based on the condition of their diesel refineries” which have been damaged by attacks during Russia’s war on Ukraine.The unusual move comes as the US has imposed sanctions on Russia’s energy companies over its war on Ukraine that began in February, 2022.The Treasury Department issued a general licence on Oct 9 allowing importation of Russian diesel until April 7, 2027.Diesel prices, which can drive inflation, are up 70% since ​the US-Israeli war with Iran began this year, despite two high-profile recent moves by Trump to boost supplies of the fuel: pressuring allies ‌to release emergency reserves and expanding access to tax-exempt red-dyed diesel, which is normally used for farm equipment.The wars in Iran and Ukraine have triggered an unprecedented global fuel supply crunch, pushing average US diesel prices to US$6.28 a gallon on Oct 8, according to the AAA motorist organisation.“Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority,” Trump said.Defence Production ActThree industry sources said earlier on Oct 9 that Trump will issue a directive in the coming days to some US department heads to find ways to control prices of diesel.The directive, which they said could take the form of a presidential memo, will push officials to find ways to bypass local and state regulations blocking energy production and use the Cold War-era Defence Production Act (DPA) to increase output of oil and fuel.Under the DPA, the president has authorities allowing loans, or loan guarantees to expand domestic manufacturing of critical materials and to require companies to prioritise government contracts for essential goods.The White House has been weighing how to use the DPA to expand refining capacity as the war with Iran exposes a US vulnerability to supply disruptions and price spikes.Refining executives told administration officials in September that federal money would be better directed ​toward making refineries more efficient or expanding existing plants rather than financing an entirely new refinery, which would be considerably more costly and ⁠take years to complete.Trump also said he expected gasoline prices to fall soon to levels around US$1.85 to US$1.95, well below Oct 9’s average price of about US$4.37 a gallon, according to AAA. REUTERS