Trump announced an "energy ceasefire" between Russia and Ukraine on Truth Social, and oil prices briefly fell on Monday.
To address voter frustration over energy costs ahead of the midterm elections, Trump reached a deal for Russia to supply diesel.
But analysts question whether Russia can deliver the agreed volumes; even if it does, it is unlikely to push market oil prices lower.
On August 15, 2025, at Joint Base Elmendorf-Richardson in Anchorage, Alaska, U.S. President Donald Trump welcomed Russian President Vladimir Putin.
Analysts say the latest geopolitical diplomatic effort by U.S. President Trump to ease tight diesel supplies before the November midterm elections is unlikely to produce a clear improvement in oil prices.
Trump announced on Sunday that Russia and Ukraine had reached an "energy ceasefire," a move that startled global policymakers, especially in Ukraine.
After the news broke, although Russia attacked a power plant shortly after the statement was released, international oil prices briefly moved lower on Monday before rebounding.
Trump said the two sides agreed that Russia would immediately release 300,000 tons of diesel into the United States and global markets, deliver another 500,000 tons in November, then continue with 1 million tons, and later deliver a further 3 million tons of diesel depending on actual conditions at Russian refineries.
Congressional midterm elections will be held in November, and Republicans face the risk of losing both the Senate and the House, so Trump wants to bring down domestic inflation.
According to a Pew Research Center poll, 84% of registered voters say economic issues are crucial to their voting decision.
Oil prices briefly fell on Monday due to expectations of improved supply. According to AAA data, diesel supply has been under pressure from the wars in Ukraine and the Middle East, and the U.S. average diesel price hit a record high of $6.5276 per gallon at the end of September.
Jefferies chief European economist Mohit Kumar wrote in a Monday research note: "Before the midterm elections, Trump is trying every possible means to push diesel prices down." "This agreement with Russia has drawn opposition both domestically in the United States and among European leaders, because it amounts to bypassing existing sanctions on Russia." "While increased diesel supply will ease some price pressure, the scale of supply stipulated in the agreement is unlikely to bring about a substantial change."
The source of Russian diesel supply remains a mystery. The U.S. Treasury has issued a temporary license to relax sanctions on Russian diesel in order to implement the agreement Trump announced last Friday.
Lombard Odier analysts said in a Monday report that the agreement, combined with China's plan to resume refined fuel exports, "has potentially important significance. The diesel shortage has amplified the inflationary effects of energy supply disruptions, with transportation, agriculture and industrial production all severely affected."
But they also warned: "Announcing shipments does not equal actual delivery," and "neither agreement can immediately repair damaged infrastructure or restore maritime shipping to normal."
Former head of the oil division at the International Energy Agency Neil Atkinson was even more pessimistic, telling that: "Where the diesel needed for this Trump agreement will come from remains a mystery. If it is diverted from Russia's own domestic supply, it will deal a heavy blow to Russia's own economy."
Atkinson noted that the Group of Seven had previously approved the release of reserves mainly consisting of diesel, but "because the scale, timing and location of the release were all vague, it did almost nothing to ease the tightness in the diesel market." "This new U.S.-Russia agreement will end the same way. Even if the first 300,000 tons, equivalent to about 70,000 barrels per day per month, could arrive tomorrow, the impact would be minimal." "The reason the impact is limited: U.S. daily diesel consumption is 3.7 million barrels, global daily diesel consumption is 29 million barrels, and U.S. commercial diesel inventories still stand at 105 million barrels." "Before the war, the Middle East Gulf region exported nearly 1 million barrels per day of diesel. Now, due to damaged refineries and blocked seaborne exports, that volume has essentially disappeared."
Singapore-based Quantum Strategy analysts issued an extremely pessimistic forecast to clients in a Monday research note.
"We expect this agreement to fail economically. We maintain a bullish view on distillates and crude oil, and a bearish view on U.S. assets," the note said.
"We judge that Putin will view this agreement as a public signal and then significantly escalate gray-zone conflict in Europe. This will have a negative impact on the euro and EU sovereign debt, and European countries will be forced to increase defense spending."
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