President Donald Trump has agreed to ease sanctions on Russia to allow it to supply global markets with 4.8 million metric tons of diesel. The agreement, which comes as the president faces pressure to lower fuel costs ahead of November's US midterm elections, has been met with scepticism from energy experts.
The initial phase covers 1.8 million metric tons. Neil Atkinson, former head of the oil industry and markets division at the International Energy Agency (IEA), told CNBC's Squawk Box Europe that the volume is so small it "does not even touch the sides." He noted that the total volume represents roughly one day of global demand or ten days of US domestic demand.
Sergey Aleksashenko, senior research fellow at the NEST Centre, estimated the initial phase could generate up to $1.25 billion in additional export revenue for Russia over three months, equivalent to about 1% of its commodity export revenues. However, the benefit to Moscow's federal budget is substantially smaller, at under $30 million per month, or less than 0.07% of monthly federal revenues. Aleksashenko concluded the deal is unlikely to meaningfully strengthen Russia's war finances.
"Russia's main gain is political: Trump's decision eases sanctions pressure and undermines Western unity," Aleksashenko told CNBC. The deal sends a signal to the Kremlin that it can secure concessions from Washington without making compromises over Ukraine.
The decision has added to uncertainty in Kyiv. Combined with restrictions on US intelligence sharing with Ukrainian forces, the diesel agreement puts President Volodymyr Zelenskyy in a difficult position as winter approaches. Higher diesel prices, which drive up costs across the wider economy, remain a domestic pressure point for the Trump administration.