President Donald Trump said Friday that Russian President Vladimir Putin will “immediately” release hundreds of thousands of tons of diesel fuel onto the global market.
Trump made the announcement on Truth Social and said the action would help lower diesel prices.
Since the illegal invasion of Ukraine, extensive sanctions have been applied to Russia. In order to keep diesel fuel flowing, the Treasury Department simultaneously announced on Friday that it would ease sanctions against Russia until April 7.
“Today, at the direction of President Trump, the Office of Foreign Assets Control (OFAC) is immediately issuing a temporary general license to enable the supply of Russian diesel to the global market,” the Treasury Department said on X.
A document posted on the Treasury website states that “the sale, delivery, unloading, or import, including importation into the United States, of diesel fuel originating in the Russian Federation is permitted until 12:01 a.m. Eastern Daylight Time on April 7, 2027.”
Since the start of the war in Iran in February, the price of diesel fuel has soared nearly 70%, and economists have warned that the price hikes would have broad inflationary effects on the global economy.
In recent weeks, the sharp escalation of the war between Russia and Ukraine has caused the price of diesel to rise even further, and for several weeks the price of diesel has broken unprecedented records.
After multiple Ukrainian attacks on Russian energy assets, the Kremlin imposed a diesel export ban in July. He extended this period until the end of October.
Earlier this year, Trump temporarily eased sanctions on Russia in an effort to slow rising oil prices. This has not had an impact on the trajectory of prices, which have continued to rise for months.
After this temporary easing of sanctions against Russia earlier this year, European allies condemned the move. “We think this is a mistake,” said German Chancellor Friedrich Merz.
Ukrainian President Volodymyr Zelenskyy also denounced the lifting of sanctions at the time, telling journalists that it would only finance the Russian “war machine”.
Immediately after Trump’s announcement, diesel futures traded in Europe fell 4%, but they remain up 135% since the start of this year.
Likewise, the price of crude oil has barely changed. Brent crude oil was trading around $104, down just 0.3% on the day.
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