BUDA, TEXAS – SEPTEMBER 14: A person pumps diesel at a Pilot gas station on September 14, 2026 in Buda, Texas. Diesel prices are rising again, with the national average reaching $6.23 per gallon as of today. The ongoing conflict involving Iran and disruptions around the Strait of Hormuz continue to strain global fuel production and transportation. (Photo by Brandon Bell/Getty Images)
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On October 9, U.S. President Donald Trump announced that, following a call with Russian President Vladimir Putin, the Russian Federation would “immediately supply over 300,000 Tons of Diesel Fuel to the American and Global Marketplace,” followed by 500,000 tons in November and 1 million tons after that. He added that, “based on the condition of their Diesel Refineries,” Russia would then deliver another 3 million tons “within a short period of time.” The Kremlin said that “the Russian side confirmed its readiness to supply oil and petroleum products to the U.S. and global markets.”
Following Trump’s post on Truth Social, the U.S. Department of the Treasury issued a statement on X saying that the Office of Foreign Assets Control would immediately issue a “temporary general license to allow the supply of Russian diesel to the global market.” Radio Free Europe reported that this would run through April 7, 2027.
Trump’s decision to ease sanctions on Russian diesel comes after The New York Times reported on October 3 that U.S. talks with Russia on ending the war in Ukraine have expanded to include a multibillion-dollar oil deal for Russian multinational energy corporation Lukoil. According to The New York Times, Putin raised the sale of Lukoil’s foreign assets during a September 5 meeting with U.S. negotiators in Moscow. The deal, which would require approval from the U.S. government and the Kremlin, would transfer Lukoil’s oil fields, refineries, and gas stations around the world to a group of investors that includes an arm of the U.S. government. The New York Times reported that U.S. negotiators viewed the deal as an opportunity to build relations with the Russian Federation while also lowering global energy prices.
It is not the first time the U.S. has eased restrictions on Russian energy. On March 12, the U.S. Department of the Treasury issued a temporary waiver allowing the sale and delivery of Russian crude oil and petroleum products that had already been loaded onto vessels, valid until April 11. The waiver was then renewed in April and again in May. Politico reported that the U.S. aimed to keep “more oil on global markets” while also “tempering crude prices” amid the Iran War, as disruptions in the Strait of Hormuz affected shipments. The waiver expired in June.
When the Russian Federation launched its full-scale invasion of Ukraine in February 2022, the United States and its allies imposed sweeping sanctions on Russia. The goal was to limit Russia’s ability to finance its war while also pressuring the Kremlin to end it.
One area targeted by the U.S. and its allies was Russia’s energy market. In March 2022, the U.S. banned imports of Russian oil, liquefied natural gas, and coal. According to the U.S. Energy Information Administration, U.S. imports of Russian crude oil and petroleum products effectively stopped after April 2022. The European Union and the United Kingdom also banned seaborne imports of Russian crude oil on December 5, 2022, and allowed imports of refined oil products until February 2023. Since then, the United States, the EU, the UK, and other countries and organizations have continued to uphold sanctions on Russian energy while also implementing new penalties as the war has continued.
For example, on July 23, the EU adopted a new sanctions package against the Russian Federation that included energy-related measures. Then, on September 18, Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, which targets Russia’s energy sector and authorizes tariffs on major buyers of Russian oil and gas.
According to EIA data, the average monthly price of gasoline in the United States between December 2022 and January 2026 was roughly $3.29 per gallon. (The average gasoline price in February was $2.91 per gallon.) The EIA data then showed that after the Iran War began and shipping through the Strait of Hormuz was disrupted, the average gasoline price per gallon in the United States was $3.64 in March. Average gasoline prices rose to $4.48 in May while the waivers on Russian oil were in effect. Most recently, in September, the average gasoline price per gallon in the U.S. was $4.36.
Similarly, Federal Reserve Economic Data showed that the average cost of diesel per gallon in the U.S. in February was $3.72. In March, it rose to $4.92. By September, FRED data showed the average cost of diesel per gallon in the U.S. was $6.29.
Like the Iran War, Russia’s ongoing full-scale invasion of Ukraine has impacted global fuel prices. Since 2023, Ukraine has carried out strikes on Russian oil refineries. The objective is to cause fuel shortages within the Russian Federation and reduce the energy revenue Russia uses to purchase weapons and equipment for its war in Ukraine. According to the International Energy Agency, Russian gasoline output is “down by 20% compared with 2025 levels,” while Russian diesel production is estimated to have “fallen by nearly 30%.”
In September 2025, amid fuel shortages in Russia linked to the strikes, the Russian Federation announced a temporary ban on exports of diesel fuel, marine fuel, and other gas oils by resellers, starting October 1, 2025. The restrictions have since been extended and expanded to fuel producers. Reuters reported on September 30 that Russia’s ban on diesel exports by producers will remain in effect through the end of October 2026.
On October 2, Russian Deputy Prime Minister Alexander Novak said Russia would “continue to monitor the situation” and that, “if diesel production exceeds domestic demand,” it would “consider partially reopening exports,” tying any reopening to Russia’s domestic fuel supply. Then, on October 9, Radio Free Europe reported that Novak said the Russian Federation was “ready to increase supplies in October, with exports expected to rise in November and December as refineries resume operations after maintenance.”
Meanwhile, the IEA found that “tighter global diesel markets have resulted in inventory draws, particularly in the United States.” The IEA also reported that diesel exports from the Middle East had fallen sharply.
Some may argue that easing restrictions on the Russian Federation’s energy market could lower global energy prices, since oil trades on a global market. For example, when the U.S. renewed the waiver on Russian oil in May, U.S. Secretary of the Treasury Scott Bessent said it would “help stabilize the physical crude market.”
But it is unclear how a Lukoil deal would address high diesel prices, since the tightening in the energy market is concentrated in diesel rather than crude oil. According to Reuters, Lukoil’s foreign assets “account for about 0.5% of global oil production.” If the deal were approved, ownership of Lukoil’s foreign assets would change, but it would add little, if any, new oil, suggesting it would not resolve current high diesel prices. Additionally, the deal would not repair Russian refineries damaged by Ukrainian strikes, nor would it lift Russia’s ban on diesel exports.
The diesel agreement would also have its limits. Its largest portion depends on the condition of Russian refineries damaged by Ukrainian strikes, and its total of about 4.8 million tons, or roughly 36 million barrels, amounts to less than eight days of global seaborne diesel trade, based on IEA figures.
Finally, the EIA’s October Short-Term Energy Outlook forecasts show that gasoline and diesel prices may ease from their current levels in the coming months. The EIA expects gasoline to average $3.91 per gallon in 2026 and diesel $5.19, falling to $3.56 and $4.49, respectively, in 2027. These forecasts, released before Trump’s diesel agreement with Putin on October 9, are subject to change based on the ongoing situation around the Strait of Hormuz as well as the Russia-Ukraine War.
In short, easing restrictions on Russian energy would likely do little to lower U.S. fuel prices. A Lukoil deal would also add little new supply, and the largest share of the new diesel agreement depends on Russian refineries damaged by Ukrainian strikes. Nevertheless, it remains to be seen how U.S. energy discussions with the Russian Federation will unfold. The U.S. Department of the Treasury’s Office of Foreign Assets Control license allowing negotiations on the Lukoil sale expires on October 22 unless it is extended again, and Russia’s ban on diesel exports by producers is set to expire on October 31, though it remains unclear how the ban will apply to the new October 9 diesel agreement.
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