Europe 'Concerned' By Trump-Putin Fuel Deal

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

Europe will continue to back its policy of sanctions against Russia despite a deal for diesel announced by U.S. President Donald Trump with Russian leader Vladimir Putin.

Sanctions to Continue

RussiEurope will continue to back its ongoing policy of sanctions against Russia despite a deal for diesel announced by the U.S. President Donald Trump with Russian leader Vladimir Putin. Europe has urged the U.S. to follow through on its support for sanctions against Russia after U.S. President Donald Trump U-turned and announced a deal for diesel with President Vladimir Putin.

News of the deal, announced by Trump on social media, has been badly received by leading European Union (EU) officials and foreign ministers, with many calling his U-turn on support for the sanctions "concerning." Market analysts have also questioned how Russia will supply extra diesel when its refineries are operating at roughly 60% of capacity thanks to a successful long-range drone strike campaign waged by Ukraine. Industrial Info Resources data as of October 12 show that 24 of Russia's 45 refineries have ongoing outages on primary refining units, with 22 of them caused by Ukraine's deep drone strikes. According to Industrial Info Resources data, there are 639 refining projects in Russia worth more than US$18 billion in investment. 

The Deal

Moscow will export 300,000 tonnes of diesel to the U.S. and global markets immediately, with an additional 500,000 tonnes in November and 1 million more after that, according to Trump's post. He added that a further 3 million tonnes would be released "within a short period." Washington issued a sanctions waiver for Russian diesel until April 2027 to support the move. The U.S. has not imported Russian diesel since July 2022 when it supported EU sanctions. His claims were confirmed by Russia Deputy Prime Minister Alexander Novak to state media agency TASS. The U.S. is one of the world's largest consumers of diesel but has seen its inventories shrink as a result of its military actions with Israel against Iran. Diesel prices in the U.S. surged to record levels in late September to US$6.52 a gallon (3.79 litres), more than twice the price from the same time in 2025. 

Energy Cease-Fire?

Trump, who is under pressure at home for rising fuel prices and the war in Iran as mid-term elections loom, also claimed that Ukraine and Russia had agreed to an "energy ceasefire." Ukraine President Volodymyr Zelenskyy said later that it was the first he had heard about it. Regarding the fuel deal, he said: "Any easing of sanctions against Russia without a clear and lasting de-escalation agreement with Russia is an obvious weakness. It plays into Russia's hands -- allowing it to kill more, wage war for longer, have even less respect for America, and inflict even greater losses and damage on the world."

Europe's Reaction 

"The U.S. is our biggest ally, but our message is clear: if we want to end this war, the only way we can do this is (by) putting more pressure on Russia," commented Kaja Kallas, high representative of the European Union for Foreign Affairs and Security Policy. "Russia has started this war. We should not forget about this." She called on the White House to enforce the bill promoted by Senator Lindsey Graham that supported far-reaching sanctions and tariffs on Moscow. Despite approving the bill, it has not been enacted by the Trump administration. "If they would enact the Graham bill, we could really put the pressure on so that Russia will finish this war," Kallas noted.

Ireland Foreign Minister Helen McEntee told the media: "What we need to do is refocus and redouble our efforts in keeping pressure on Russia. Our priority has to be to maintain that pressure, but also to maintain our channels with the U.S., because this is not going to be achievable without the support of the U.S."

Reality Check

Analysts believe that the diesel deal will be difficult to realize. Speaking to the FT newspaper, Michelle Brouhard, head of policy and geopolitical risk at energy intelligence firm Kpler, questioned whether Russia can supply the promised amounts. "The biggest question for me is: where are they going to get the diesel from? Russia does not have an export problem? It has a refining problem." For months, Russia has banned diesel exports due to problems supplying its own citizens. 

Speaking to Newsweek, Tom Kloza, senior energy and market adviser at Gulf Oil, said Russia currently lacks the ability to offer relevant diesel volumes to global markets because of the significant damage to its refining capacity by Ukrainian drone attacks. "The market reacted with a US$0.7-0.8 cents per gallon drop after the news broke, but nearly all traders I talk to doubt whether this will effect a trend change. Diesel molecules are scarce and promise to be scarce through October, into November and perhaps beyond."

Key Takeaways

• Europe is concerned by the U.S. signing a deal for diesel with Russia and backtracking on its support for EU sanctions against it. 
• Moscow will export 300,000 tonnes of diesel to the U.S. and global markets immediately, followed by an additional 500,000 tonnes in November and 1 million more after that. 
• Industrial Info Resources is tracking 639 refining projects in Russia worth more than US$18 billion in investment. 

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).