The Treasury Department issued a temporary license for Russian diesel after President Donald Trump announced a supply deal with Russian President Vladimir Putin. The move delays U.S. sanctions on some fuel shipments until April 2027, even as diesel averaged $6.28 a gallon nationally. The White House didn’t say who would pay for the fuel or when it would reach buyers. Trump said lower prices for Americans, especially farmers, ranchers and truckers, were his priority.
Fuel Revenues and Costs
Trump said Russia would immediately supply more than 300,000 tons of diesel, followed by 500,000 tons in November, 1 million tons “immediately thereafter” and another 3 million tons “within a short period of time.” The Treasury license covers Russian diesel loaded onto tankers as of Friday and exempts those shipments from U.S. sanctions until April 2027.
Last month, Trump signed a Russia sanctions law intended to curb energy revenues that help fuel Russia’s war against Ukraine. The law directs the administration to target major importers of Russian oil and gas with tariffs of up to 100% on the five largest importers, while allowing an exception for certain countries. It also envisions measures against Russian officials, banks and a shadow fleet of tankers, and bans new U.S. investment in Russia and the handling of sovereign debt.
The U.S. hasn’t imported Russian oil or gas since 2022, when the Biden administration banned those imports after Moscow invaded Ukraine, according to the U.S. Energy Information Administration. Treasury had issued several licenses for Russian fuel shipments since the Iran war began, but this was the first since the Ukraine war began to ease diesel sanctions for longer than the standard 30-day period. Treasury Secretary Scott Bessent had ruled out such a move earlier in the year.
The deal followed a surge in global prices as the war in Iran disrupted the energy sector. U.S. diesel reached a record $6.52 on Sept. 22. Diesel futures fell after Trump announced the deal, but the effect on oil prices remained unclear amid global supply shortages.
“It’s kind of shuffling deck chairs on the Titanic,” said Michael Lynch of the Energy Policy Research Foundation. Russian diesel shipped to the U.S. could divert supplies from existing customers, he said, prompting them to seek fuel elsewhere and leaving prices “basically where it is now.” Russia had banned diesel exports since July as it struggled to meet domestic demand after repeated Ukrainian attacks on its oil refineries. The International Energy Agency said Russian diesel output had fallen about 30%.
Sanctions and the War
Trump’s announcement raised questions about whether the White House would impose sanctions this month under the bipartisan law. He didn’t address sanctions or Russia’s war in his announcement. The White House didn’t immediately answer questions about the diesel’s cost or whether supplies expected next month would arrive before Election Day on Nov. 3.
Ukrainian President Volodymyr Zelenskyy called the deal “a weak decision, unfortunately, a weak decision by strong partners.” Trump’s envoy Steve Witkoff and son-in-law Jared Kushner were meeting with Ukrainian officials in Miami to discuss a proposal to try to end the war when Trump announced the deal.
“I believe our team is simply being used as a smokescreen. And that is certainly not fair. It is certainly not how partners should treat each other,” Zelenskyy said. He later wrote that Russia would repay the deal “with further terror and perfidy,” calling it an investment in prolonging the war.
The Kremlin said Trump and Putin devoted “significant attention to the prospects of resolving the Ukrainian crisis” and discussed Iran and bilateral relations. Putin said Russia had “confirmed its readiness to supply oil and oil products to the American and global markets.” Russian Deputy Prime Minister Alexander Novak told state news agency Tass that Russia was “immediately starting to lift restrictions on diesel exports ahead of schedule” and that the domestic market would be “fully supplied” with diesel.
The Fed Inquiry
Trump also established a “committee of inquiry” into allegations that Federal Reserve Governor Lisa Cook made false statements in mortgage applications, opening another stage in his effort to remove her. A White House hearing is scheduled for Nov. 5. Trump said Cook “shall” attend. The hearing won’t be public, but officials will publish a transcript.
Cook has denied wrongdoing and hasn’t been charged with a crime. Her attorneys, Abbe Lowell and Norman Eisen, said she made an “inadvertent error” and referred to one property as a vacation home in other documents. They said Cook welcomed the chance to present facts and demonstrate “there is no legal basis to fire her.”
The Supreme Court ruled in June that Cook could keep her job after Trump sought to fire her the previous year. A footnote said Trump could “try again” if Cook received proper notice and an opportunity to respond. The court said a for-cause firing required an alleged offense that was serious and related to the official’s job.
The inquiry committee includes Kevin Hassett, Trump’s top economic adviser, who has frequently echoed his criticisms of the Fed; Keith Sonderling, the acting director of the Office of Government Ethics; and Andrea Lucas, chair of the Equal Employment Opportunity Commission. Trump appointed all three to their roles named in the article.
Trump has repeatedly called for the Fed to cut its key interest rate, but the Fed raised it last month. The Sept. 16 vote was unanimous among the 12 voting members, including Cook, after Chairman Kevin Warsh signaled higher rates were likely in August. Cook’s attorneys said they were evaluating whether the hearing could be “a genuine one and not simply a box checking exercise.”