Three weeks before the midterm elections, Donald Trump announced an agreement with Vladimir Putin for the delivery of Russian diesel, in an attempt to reduce fuel prices. Kiev, taken by surprise, says it pays the price, and experts believe the effect will be more political than economic.
On Friday afternoon, about an hour before the closure of the American markets for the weekend, President Donald Trump announced an agreement with the Kremlin leader, Vladimir Putin, regarding diesel deliveries.
“I have just concluded a very successful discussion with the President of Russia, Vladimir Putin, in which it was agreed that Russia will immediately supply over 300,000 tons of diesel to the American and global markets,” Trump wrote on the Truth Social network. He added that more quantities will follow.
According to the American president, prices “will drop quickly and at a record pace”. However, futures contracts for diesel have only dropped by 4%.
A limited impact
The announcement comes three weeks before the midterm elections on November 3, at a time when high fuel costs, on which transportation and food prices depend, are weighing on the American budget. Last week, Trump’s popularity rating dropped to 32%, the lowest level of his terms, and the Republican Party is seen by many observers as likely to lose in the battle for control of Congress.
The announced quantity is reduced compared to the global demand. The fuel shortage is primarily caused by the USA’s war with Iran, but it has been exacerbated by Ukraine’s drone strikes on Russian oil installations, which have diminished Russia’s refining capacity.
Oil analyst Tom Kloza has called the announcement “the latest hollow gesture in a week of unsubstantiated rhetoric.” According to him, the administration wants to appear as if it’s doing everything it can, but it can’t change reality. Kloza expects that Russia will soon be unable to export diesel due to affected refineries, and he does not anticipate a lasting decrease in prices following the statement.
The effect could rather be political. Trump won the presidency twice by addressing the working class (three times, he himself says), but it is not clear whether a short-term financial relief will translate into votes.
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