U.S. Energy Secretary Chris Wright said in an interview with CNBC on Tuesday that the United States might allow more diesel from Russia to enter the global market depending on Moscow's actions.
Wright described the U.S. sanctions imposed by the Trump administration earlier this month to suspend diesel exports to Russia as a "incentive" for Moscow to end the war in Ukraine. He said that this would help to marginally improve the fuel supply.
According to data from the ship tracking platform MarineTraffic, the oil tanker Talisman flying the Russian flag is expected to arrive on the east coast of the United States on November 9th. Another oil tanker, Leruo, has already set sail from Russia, heading towards the "Atlantic coast," but it has not explicitly declared that its destination is the United States.
In an interview with the CNBC program “Power Lunch”, Wright said that under U.S. sanctions exemptions, it is “very likely” that more oil tankers loaded with Russian diesel will set sail. He said, “This is an attempt to offer a carrot in front of Russia.”
President Trump and President Putin reached an agreement to allow Russia to export 800,000 tons of diesel in October and November, followed by another 1 million tons.
As Trump reached this agreement with Putin, he was facing political pressure to bring down the soaring diesel prices before the U.S. mid-term elections next Tuesday. Since the attacks by the United States and Israel on Iran on February 28, fuel prices have been on the rise.
However, analysts say that the export volumes in this diesel agreement between Trump and Putin will not substantially lower prices, as these shipment volumes are still very small compared to the global total demand of about 28 million barrels per day.
The first batch of 300,000 tons of diesel from Russia, if shipped within a month, would amount to about 75,000 barrels per day. The second batch of 500,000 tons would correspond to approximately 124,000 barrels per day.
Ukrainian President Zelensky has launched severe criticism of this diesel agreement. Kiev has been targeting Russian refineries this year in an attempt to reduce the income that the Kremlin derives from energy exports and to limit Moscow's ability to wage war.
These attacks forced Moscow to impose a ban on diesel exports in July. The Kremlin has partially lifted this ban in order to fulfill the agreement reached between Trump and Putin.
Several Republican senators also criticized the agreement and, together with their Democratic colleagues, signed a letter condemning it as "a gift to our opponents and a betrayal of our allies."
