On October 9, Donald Trump, the President of the United States, announced an agreement with Vladimir Putin for the supply of over 300,000 tons of Russian diesel to the American and global markets. This agreement, announced to reduce fuel prices ahead of the U.S. midterm elections, will gradually include the supply of 500,000 tons in November, one million tons in later stages, and another three million tons thereafter. At the same time, Washington has temporarily eased sanctions related to Russian diesel shipments until April 2027.
Possible Impacts of This Agreement on the Global Energy Market
Hashim Oraki, a professor at Sharif University of Technology and the head of the Iranian Energy Association, explained that this agreement is likely to have more of a psychological effect on the U.S. market in the short term rather than a significant impact on global energy prices. According to him, even if this agreement reaches over four and a half million tons of diesel, it is not a significant figure compared to the daily consumption in the U.S., which is about 20 million barrels. Therefore, it is not expected that this agreement alone will create a noticeable change in the price of diesel in the U.S. or the equations of the global energy market.
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Political and Geopolitical Consequences
Oraki pointed out that the potential closeness between the U.S. and Russia could impact Washington's relations with Europe. One of the main benefits of such an agreement for Putin is the possible change in the U.S. stance regarding the Ukraine war. If the two countries reach a broader agreement, there is a possibility of reduced U.S. support for Ukraine, which could lead to a distancing of the U.S. from Europe and NATO.
Oraki also highlighted the importance of the Strait of Hormuz in this context, stating that the extent of the impact of this cooperation depends on the depth of relations between the two countries. If the U.S. and Russia reach a broader collaboration, a new composition in the global energy market will emerge, which could affect the position of other producers and energy transit routes.
Considering that global oil demand is about 105 million barrels per day, the volume discussed in this agreement does not have a decisive share. Therefore, it cannot be expected that this agreement will significantly reduce global oil and diesel prices or that consumers around the world will feel a noticeable decrease in fuel costs.
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