President Donald Trump announced on Sunday that Russia and Ukraine had agreed to an immediate 'energy ceasefire', posting on Truth Social: 'Effective immediately, there is an ENERGY CEASEFIRE in the War between Russia and Ukraine. Both parties have agreed. Do not break it!' Trump offered no further elaboration on what the ceasefire would include. Neither Kyiv nor Moscow had commented on the assertion at the time of initial reporting [Source: BBC News]. Ukrainian President Volodymyr Zelenskyy told Axios the announcement was 'news for me', adding that 'if Russians agree to an energy ceasefire Ukraine will agree' and asking Trump to confirm when the ceasefire was to begin [Source: NBC News]. In a separate interview with ABC News, Zelenskyy said he would hold elections if Russia agreed to a 60-day ceasefire, and separately stated that Ukraine was ready to halt strikes on Russian refineries if the Kremlin halted its own attacks on Ukraine's energy infrastructure.
The ceasefire announcement followed a deal Trump struck with Russian President Vladimir Putin on October 9, in which Russia committed to supply more than 4 million tons of diesel to the global market. Under the arrangement, Russia would immediately supply more than 300,000 tons, a further 500,000 tons in November, and 1 million tons subsequently, with a further 3 million tons contingent on the condition of Russian refineries [Source: CNBC]. Bloomberg's calculations put the first three tranches of promised Russian diesel at approximately 13.5 million barrels [Source: Bloomberg]. To facilitate the deal, the US Treasury Department temporarily waived sanctions on Russian diesel through April 2027. OFAC issued General License 135 authorising the sale, delivery, offloading and import of Russian-origin diesel through 12:01 a.m. eastern time on April 7, 2027 [Source: Ship & Bunker]. The wholesale diesel price in New York harbour fell approximately 4.5% to $4.67 a gallon on the announcement. US pump diesel had hit a record $6.53 a gallon in recent weeks [Source: Ship & Bunker].
Russia's government partially lifted its own diesel export ban effective October 10, permitting 500,000 tonnes of diesel to be supplied to the global market at this stage [Source: TASS via Ukrainska Pravda]. Russian Deputy Prime Minister Alexander Novak said the partial lifting of the ban would not affect the interests of Russian consumers [Source: TASS via Ukrainska Pravda]. Russia had imposed the diesel export ban since July 8, after Ukrainian drone strikes on its refineries cut output, with the ban having been extended to the end of October. Diesel prices had surged globally as Ukraine struck Russian refineries, forcing Moscow to ban exports, with Iranian and Houthi attacks on Middle East refineries further constraining supplies.
The Trump-Putin diesel deal drew criticism from Zelenskyy, who wrote in a social media post that 'Gifts to Putin will not bring peace or any benefit to the civilized world' and that allowing Russia to sell petroleum products is 'an investment in a war that must be ended, not prolonged' [Source: CNBC]. Former US Ambassador to Ukraine William Taylor told Bloomberg that Trump's Russian diesel agreement could provide Moscow with additional revenue to prolong its war in Ukraine while undermining economic sanctions [Source: Bloomberg]. Energy and foreign policy analysts predicted the deal would have little 'meaningful' impact for motorists and businesses in the US and overseas [Source: The Guardian]. The US Ending Importation of Russian Oil Act of 2022, which wrote the ban on Russian energy imports into law, remains in effect, with the OFAC General License treated as a temporary executive waiver. The EU and UK bans on Russian refined products, in place since February 5, 2023, along with a $100 per barrel price cap for premium products, also remain in force. Trump had made a similar energy-ceasefire announcement approximately a month prior, only for the two sides to continue aerial attacks on each other's energy facilities.
Sources: Bloomberg, NBC News, BBC News, CNBC, Ship & Bunker, The Guardian, TASS via Ukrainska Pravda