President Donald Trump's diesel deal with Russia is unlikely to significantly reduce fuel prices for truckers and farmers, because the amount that Moscow will supposedly export is very small compared with U.S. and global demand.
Since diesel is used to transport a broad range of goods as well as to harvest crops, its rising cost tends to trickle throughout the economy, boosting prices. As the U.S. midterm elections approach in November, Trump faces pressure to address fuel prices due to its impact on inflation.
Russia will supply 300,000 metric tons immediately to the global market, Trump said Friday in his Truth Social post. One metric ton of diesel is equivalent to about 7.45 barrels, according to S&P Global Platts.
The Kremlin, then, has agreed to initially export about 2.24 million barrels, or 74,500 barrels per day if spread out over an entire month.
This equals about 2% of total U.S. demand, which stood at 3.65 million bpd during week ended Oct. 2, according to the Energy Information Administration. It represents far less than 1% of the more than 28 million bpd that the world consumes, according to the International Energy Agency.