US and Russia Strike Diesel Deal as IEA Releases 100 Million Barrels to Cool Global Fuel Prices
Washington and Moscow agree to send Russian diesel worldwide while emergency oil reserves are tapped to ease tight supplies.
The United States and Russia have agreed on a deal for Russia to supply diesel to global markets, US President Donald Trump said, with the goal of lowering fuel prices worldwide [258385]. The move reverses years of pressure placed on the Russian economy after its invasion of Ukraine [258385].
Trump announced the deal on Friday, as US, Ukrainian and European officials were due to meet in Miami for a new diplomatic effort to end Russia's war in Ukraine [258364]. Moscow launched its full-scale invasion in February 2022 and now occupies about one-fifth of Ukrainian territory [258364].
The diesel agreement comes amid a global push to boost fuel supplies. The International Energy Agency (IEA) announced that its member countries will release oil from emergency reserves faster than planned, completing a commitment made in March [256329]. The release will bring about 100 million barrels of oil to the market, according to IEA Executive Director Fatih Birol, with diesel prioritized as supplies remain tight worldwide [256329]. The IEA is an international group of oil-consuming nations whose members hold emergency oil stocks to respond to supply disruptions [256329].
France also announced it will release 10 million barrels of diesel from its strategic reserves to ease pressure on the fuel market, Prime Minister Sebastien Lecornu said Wednesday [257720].
In a separate move aimed at lowering fuel costs, the Trump administration has waived rules on red-dyed diesel, allowing highway drivers to use the tax-exempt farm fuel through the end of 2026 [255856]. Red-dyed diesel is a cheaper type of fuel normally reserved for farm vehicles and off-road equipment, marked with red dye to show it is not taxed for road use [255856]. Under the new waiver, regular highway drivers can now buy and use this fuel legally, though local tax and other concerns remain unresolved [255856].
Meanwhile, Russia's own fuel production has been crippled by Ukraine's drone strikes on Russian refineries. Russia's diesel exports, once its largest fuel export, have fallen to their lowest level in a decade [258346]. To protect its domestic market, Russia now sells fuel abroad at a discount while paying subsidies to keep domestic pumps running, though crude oil revenue continues to flow into Moscow's coffers [258346].