It would be followed by another 500,000 tonnes in November and 1 million tonnes “immediately thereafter”.Russian officials said on Wednesday that the initial shipment would be the first of several.However, the scale and timing of those shipments remain uncertain. Russia has been dealing with domestic fuel shortages linked to Ukrainian drone attacks on its refineries, which have disrupted refining capacity and forced Moscow to introduce restrictions on fuel exports.The ability to fulfil the promised deliveries will depend on how quickly Russia can restore production while meeting its own domestic demand.The deal also comes after Trump called off plans for another round of sanctions targeting Russia.
Among the proposed measures was a 100 percent tariff on goods from major purchasers of Russian crude oil, including China and India.Will the shipment lower prices before the midterms?Analysts say the first shipment is unlikely to deliver meaningful relief to US consumers before the midterm elections. US retail diesel prices topped $6 a gallon ($1.59 per litre) in September and have remained elevated.On Wednesday, the national average stood at $6.31 a gallon ($1.67 per litre), according to the American Automobile Association (AAA), down from $6.51 ($1.72 per litre) a month earlier, marking a 3.1 percent decrease but still significantly higher than this time last year, at $3.62 ($0.96 per litre).“The volumes Russia can provide are small in comparison to the global shortage and US’s own production.
The cargo is unlikely to have a meaningful impact on supply or meaningfully lower the price,” Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, told Al Jazeera.“The reported shipment is equivalent to roughly two hours of US distillate consumption. Even if it arrives as planned, it will make very little difference to national supply,” Aarathi Krishnan, CEO of Raksha Intelligence, told Al Jazeera.The first tanker may not even reach the US before voters head to the polls, Ziemba said.
Departing on Thursday would mark the beginning of its journey, not the date the fuel becomes available to consumers.Any sustained reduction in prices would depend on a broader improvement in global supply, rather than a single delivery.“Russia’s ability to supply more diesel depends partly on the condition of its refineries. Ukraine’s attacks affect those facilities.
And Washington’s desire for lower fuel prices creates an interest in reducing that disruption,” Krishnan added.Would a ceasefire impact fuel prices long term?A long-term ceasefire between Russia and Ukraine could help ease pressure on energy markets by allowing damaged Russian refineries to be rebuilt and production to increase.“This [the current agreement] is more about political posturing to get the US to further increase pressure on Ukraine and align with Russia,” Ziemba said.She added that meaningful relief for the global oil market would depend in large part on developments in the Middle East, particularly the Strait of Hormuz, a critical shipping route through which roughly one-fifth of the world’s oil and liquefied natural gas supplies passed before the US-Israel attack on Iran.The Russian shipment comes as conflict involving Iran and disruptions to energy shipping have intensified pressure on global fuel markets more broadly. There were at least 18 attacks on vessels over the previous two weeks, according to Kpler, a data analytics platform.
On Wednesday, Iranian Foreign Minister Abbas Araghchi told the Financial Times that Iran was fully prepared to defend itself.The Russian agreement is unlikely to resolve the underlying supply problem on its own without a chance to rebuild its refineries.“The agreement may help individual buyers or provide some immediate reassurance to traders. But sustained price relief will depend on actual increases in available diesel, which Russia has not yet demonstrated it can deliver,” Krishnan said.