Energy Secretary Chris Wright said in a CNBC interview on Tuesday that depending on the Russian government’s actions, the United States could allow more diesel fuel supplies from Russia to the global market.
Wright claimed that the Trump administration’s suspension of US sanctions on Russian diesel exports earlier this month was an “incentive” for Russia to end the war in Ukraine. It will help provide last-minute fuel supplies, he said.
The Russian-flagged tanker Talisman is scheduled to arrive on the U.S. East Coast on November 9, according to ship tracking platform Marine Traffic. Another tanker, the Reluo, left Russia en route to the “Atlantic Coast” without specifying its destination as the United States.
Wright told CNBC’s “Power Lunch” that there is “a good chance” more tankers carrying Russian diesel will set sail after receiving a waiver from U.S. sanctions.
“We’re trying to put a carrot in front of Russia,” the energy secretary said.
President Donald Trump struck a deal with President Vladimir Putin under which Russia will export 800,000 tonnes of diesel in October and November, and another 1 million tonnes thereafter.
President Trump has reached a deal with President Putin as he faces political pressure to lower soaring diesel prices ahead of next Tuesday’s US midterm elections. Fuel prices have soared since the US and Israel attacked Iran on February 28th.
But analysts say the Trump-Putin deal’s diesel volumes are unlikely to lower prices significantly because shipments are small compared to total global demand of about 28 million barrels per day.
The initial shipment from Russia will be 300,000 tonnes, equivalent to about 75,000 barrels per day if deployed over a month. The second tranche is 500,000 tonnes, equivalent to approximately 124,000 barrels per day.
Ukrainian President Volodymyr Zelenskiy harshly criticized the diesel deal. Kiev attacked Russian oil refineries this year in a bid to cut the revenue the Kremlin collects from energy exports and curb Moscow’s ability to wage war.
The strike forced the Russian government to impose a diesel export ban in July. The Kremlin partially lifted the ban in order to implement the Trump-Putin deal.
Several Republican senators also condemned the deal, signing a letter with their Democratic colleagues condemning it as “a gift to our enemies and a betrayal of our allies.”
