Trump throws Putin another lifeline with diesel deal

U.S. President Donald Trump has handed Russian President Vladimir Putin another gift ahead of the U.S. midterm elections, with Republicans increasingly at risk of losing both chambers of Congress.

The stated aim of the deal between the real estate magnate and the Russian autocrat to release hundreds of thousands of barrels of diesel is to bring down fuel prices ahead of the November 3 vote. The reality is different: the agreement’s impact on lowering fuel costs in the United States will be minimal, while it effectively puts an end to the economic stranglehold imposed on Russia as punishment for its invasion of Ukraine. In short, it provides an unexpected lifeline to a Kremlin under severe financial strain, one that now devotes nearly half of its budget to defense and security and will consequently have greater room to finance a military campaign that appears destined to drag on indefinitely.

Despite the extensive damage to their refineries, Russian oil companies have already shipped a first cargo of diesel to the United States. It will not be the last: further deliveries are expected in the coming weeks and months, both before and after the midterm elections.

The volumes involved, however, are too small to trigger any meaningful shift in the U.S. domestic market, where diesel, a fuel critical to agriculture, freight transport and industry, has surged above $6 a gallon — an unprecedented level.

According to analysts at Eurasia Group, the initial shipment of around 300,000 tonnes of Russian diesel amounts to only about half a day’s U.S. distillate consumption, far too little to have a meaningful impact on prices. And they argue that the effects on Russia’s domestic market, public finances and global fuel supplies would be equally limited.

The deal also gives Moscow the freedom to market diesel in other parts of the world without fear of reprisals from Washington. In a complete reversal of previous policy, sanctions on countries willing to purchase Russian fuel are effectively being consigned to the scrapheap. The same can be said of the West’s common front on Russia: if any doubt remained, the lifting of restrictions on diesel has shattered it.

Buoyed by the agreement, the Kremlin moved quickly to express its appreciation. Kirill Dmitriev, one of Putin’s closest associates, said on Wednesday that the deal opens the door to “other opportunities for economic and investment cooperation” between the two powers and urged supporters to “keep explaining, using concrete examples, that sanctions primarily harm [...] the American people and American farmers.”

As things stand, Moscow has not had to offer any concessions in exchange for this unexpected boost from Washington.

With Election Day just around the corner, Republicans are desperate for a piece of good economic news to help defy increasingly gloomy polling forecasts. But not at any cost. At least not according to six Republican senators who last Tuesday signed a letter rebuking Trump over his deal with Putin. In the letter, which was also backed by Democratic lawmakers, they remind the president that the rapprochement with Russia runs counter to a 2022 law requiring congressional notification before any such purchase can take place.

“The deal you struck with President Vladimir Putin on October 9 will not achieve just ends, nor will it benefit Americans. [It] only provides Putin with more fuel to finance his war machine and enables Russia to continue its brutal attacks on Ukrainian civilians,” the letter states.

Of the six Republican signatories, only one is up for reelection on November 3: Susan Collins from Maine, who has been doing everything possible to distance herself from Trump in a race that has become increasingly challenging in recent months.

“This deal is a gift to our adversary and a betrayal of our Allies; it should be rescinded,” the letter concludes, referring to the agreement with the Kremlin.

Several Republican candidates across the country have spent weeks, with varying degrees of boldness, criticizing Trump over the decisions that have fueled inflation and undermined their reelection prospects.

This growing chorus of dissenters largely agrees on the culprit: their party leader’s decision to draw the United States into a war with Iran that has dragged on far longer than expected. They argue that the conflict is largely responsible for rising inflation, as well as soaring gasoline and diesel prices, which have become a major political liability ahead of the midterm elections.

“We need to lower diesel prices, but I don’t think we need to be making a deal with Russia to do it,” Ashley Hinson, the Republican Senate candidate in Iowa, said on Wednesday. “We cannot allow Putin to win that war.”

Meanwhile, Trump has blamed Ukraine for high fuel prices, specifically pointing to its attacks on Russian refineries. He has also stepped up pressure on Ukrainian President Volodymyr Zelenskiy, even going so far as to suggest that Ukrainians should “get a new president.” On Sunday, Zelenskiy said in an interview with the U.S. network ABC that he would be willing to hold elections if Moscow committed to suspending hostilities for a two-month period.

And Putin? The Russian leader remains steadfast in his refusal to negotiate with Ukraine and determined to make the country pay for the attacks it carried out during Russia’s parliamentary elections last month. He now pursues that goal with somewhat greater financial breathing room, and with renewed legitimacy, courtesy of a Trump who, when forced to choose between Kyiv and Moscow, has more often than not sided with the latter. The agreement has shifted the broader landscape, bringing it considerably closer to the outcome the Kremlin has long sought.

Since the deal with the White House, which on Sunday announced an “energy ceasefire” that has yet to take effect and that few believe will hold, Moscow has carried out attacks as brutal as the October 10 strike on Zaporizhzhia, which killed 22 people, including four children. Putin also appears ready to intensify his military campaign, particularly against energy infrastructure. With its electricity and gas networks already badly damaged, Ukraine faces its fifth winter of war with mounting anxiety, one that could prove the harshest yet for civilians since the invasion began.

Even so, Kyiv shows no sign of backing down. On Thursday, Zelenskiy made clear that, given the Kremlin’s apparent lack of interest in the unusual ceasefire announced by Trump, Ukrainian forces will continue targeting Russian refineries. A potentially dangerous boomerang effect now hangs over Trump’s strategy: however much he wants Russian exports to increase, Moscow’s export capacity, already strained by the challenge of meeting domestic demand, is likely to remain limited.

Bank of America analysts argue that easing sanctions and releasing reserves may provide temporary relief, but will not address the underlying constraints in diesel markets, including low inventories, limited refining capacity and logistical bottlenecks.

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