Diesel Crunch Deepens as Energy Deals Face Scrutiny

Russian Deputy Prime Minister Alexander Novak said negotiations are underway between Russia’s Ministry of Energy and the U.S. Department of Energy on contracts for diesel supplies. His statement followed U.S. President Donald Trump’s announcement that he had reached an agreement with Russian President Vladimir Putin during a phone call. Trump said Russia would supply more than 300,000 tons of diesel immediately for the U.S. and global markets, followed by 500,000 tons in November and 1 million tons “immediately thereafter.” He also said a further 3 million tons would be delivered “within a short period of time.” The article distinguishes Trump’s announcement from the status of formal arrangements: Novak described contract negotiations as ongoing, rather than confirming that supply contracts had been finalized. The proposed shipments would come amid a U.S. policy backdrop involving recently passed congressional legislation. That law directs Trump to impose substantial tariffs on the leading importers of Russian oil or natural gas, while allowing an exception for countries that import less than 15% of Russia’s natural gas exports and have taken significant steps to reduce those imports. The report presents the proposed diesel supply and the negotiations alongside this tariff legislation, but does not explain how the two developments might interact or provide further details about the terms, timing, or implementation of any contracts. Its account relies on statements attributed to Novak and Trump, with Trump’s supply figures reported as his announcement.

CNBC’s Daily Open newsletter surveys developments in energy, finance, technology and global economics. Analysts doubt that President Donald Trump’s diesel supply deal with Russia will meaningfully lower U.S. fuel prices: its 4.8 million metric tons of supply represents slightly more than one day of global demand, while truckers and farmers continue to face high costs. The deal comes less than a month before U.S. midterm elections, amid political pressure to reduce fuel prices. Commodity trader Paul Tudor Jones warned that the Iran conflict could push oil up another $20–$25. U.S. banks are reporting mixed results amid concerns about borrowing costs, artificial intelligence and expensive oil. Bank of America, due to report earnings Wednesday, has also been assessed more than $1.2 billion in federal penalties over alleged sanctions and anti-money-laundering violations. Investors are watching interest-rate expectations after comments by New York Fed President John Williams diverged from market views and those of some central bank colleagues. In technology, Anthropic is set to disclose third-quarter financials to potential investors for the first time, as it prepares for a possible major IPO. Apple announced HomeView, a voice-controlled smart-home hub featuring new Siri AI capabilities. The launch is CEO John Ternus’ first product introduction outside the iPhone since succeeding Tim Cook. The IMF and World Bank Annual Meetings continued in Bangkok. The IMF raised its 2026 global growth forecast to 3.1%, slightly above its July projection, but Economic Counsellor Silvana Tenreyro cautioned that global resilience is under strain and risks lean to the downside. The newsletter also reports that Saudi OpenAI employee Abdulrahman Alfozan was arrested after authorities found a recording device in the company’s executive conference room. OpenAI said the employee was terminated.

The International Energy Agency warns that diesel supply constraints will persist into 2027, with replenishment of depleted inventories unlikely before the second half of that year. In its October Oil Market Report, the IEA attributes the squeeze to unusually large inventory declines, reduced exports, and strong diesel demand that has proved relatively resistant to high prices. Global diesel exports fell by 700,000 barrels per day year over year in September, as losses from Russia and the Middle East were only partly offset by supply elsewhere. Although refinery output is expected to recover toward year-end, the agency projects that supply will still fall short of demand in the fourth quarter of 2026. Wholesale diesel prices reached record levels in several major markets, topping $200 a barrel in Singapore and reaching about $220 in Europe and the United States. The IEA also warned that freight-market tensions could push delivered prices higher in importing regions. U.S. President Donald Trump announced a deal for Russia to supply 300,000 metric tons of diesel, but European and U.S. officials criticized the move. The IEA said the proposed volumes would have little macroeconomic significance and questioned whether Russia could deliver them. The agency forecasts that total oil demand will decline by an average of 2.6 million barrels per day in 2026, with diesel accounting for a quarter of the drop. Oil supply is expected to fall by 5.8 million barrels per day this year before rising by 7.7 million barrels per day in 2027. However, the IEA cautions that renewed attacks in the Gulf could undermine that recovery. Recent Houthi attacks in Saudi Arabia, including a reported strike targeting a Saudi Aramco administrative building, add to the risks facing the market.

President Donald Trump said Taiwan has agreed to buy 30% of the gas produced by the proposed Alaska LNG pipeline project for 20 years, describing the commitment as a guarantee of the project’s success. The terms of the arrangement were not immediately clear. Taiwan’s state-owned energy company, CPC Corp, reportedly reached an agreement last year with Alaska Gasline Development Corp to purchase liquefied natural gas and invest in the project. Trump’s announcement comes amid uncertainty about South Korea’s involvement in the $50 billion project. He has repeatedly said Seoul agreed to participate, but South Korea has said its participation has not been finalized. Trump also said South Korea would invest $4.4 billion in the project, in addition to $50 billion already committed to Alaska. He has warned that he would raise charges on South Korea—and potentially double them—if it did not sign soon, without specifying what charges he meant. The remarks prompted South Korean media speculation that he was referring to tariffs. Taiwan’s potential energy commitment comes as its demand rises, partly amid growth tied to artificial intelligence and semiconductor manufacturing. The island depends on imports for more than 90% of its energy supply. Its economic affairs ministry has forecast annual electricity-demand growth of about 2.5% through 2035, a rate it said would exceed forecasts for Japan and South Korea and rank as the second-highest in Taiwan’s history. Taiwan is also awaiting major new U.S. arms sales, while Beijing considers the island part of its territory. Alaska LNG developer Glenfarne said in a report to the U.S. government this month that the project aims to deliver its first gas in 2029. The White House, Taiwan’s energy ministry, and CPC Corp did not immediately respond to CNBC’s requests for comment.

The article argues that US President Donald Trump’s agreement with Russian President Vladimir Putin to resume some Russian diesel supplies is unlikely to bring significant or rapid relief to global fuel prices. Experts interviewed by DW identify the wars in Iran and Ukraine, disruptions to shipping through the Strait of Hormuz and Bab al-Mandeb, and damage or interruptions at refineries as the main drivers of high diesel prices. Although crude shipments through Hormuz have partly recovered, refined-product flows remain far below prewar levels, and transport, insurance, and security costs continue to constrain supply. Trump announced a temporary suspension of some Russia sanctions and said Russian diesel imports would make prices fall quickly. Russia confirmed the arrangement. But experts question the scale of its potential impact: a promised 2.2 million barrels would cover less than one day of US demand, while even the announced total of 35.8 million barrels would amount to about nine days. Russia has also fallen behind the United States as the world’s largest diesel exporter and faces domestic shortages and Ukrainian attacks on its refineries. The article also notes that US export restrictions, which Trump floated and then abandoned, could worsen domestic prices by forcing production cuts and would shift shortages onto buyers in Latin America and Europe rather than resolve them. The EU has increasingly relied on US diesel since sanctions curtailed Russian supplies, while Canada supplies most US diesel imports but is unlikely to expand deliveries substantially amid political and trade tensions. Overall, the deal may alter trade flows but cannot quickly undo the broader supply constraints driving prices.

The International Energy Agency (IEA) warns that Europe could see wholesale diesel prices rise again in the coming weeks as global fuel supplies remain tight into 2027. Although supply increased by 2.5 million barrels a day in September, reaching 102.3 million, it remained below estimated demand of 103.5 million barrels a day. The recovery in Gulf oil output has not resolved the shortfall, and the IEA says the market remains vulnerable to further disruption. The article links the fragile recovery to conflict around the Strait of Hormuz, through which about one-fifth of global oil passes. Iran has restricted traffic and increased attacks on ships, while Iran-backed Houthi rebels have targeted Saudi oil sites. Reports of ships being struck or sunk have added to security concerns. Brent crude rose above $107 a barrel before easing, while US benchmark West Texas Intermediate traded near $94.75. Diesel prices have fallen from September records above $200 a barrel but remain nearly twice crude oil prices and pre-crisis levels. Middle Eastern fuel exports are below half their pre-war levels, and Ukrainian drone strikes have hit Russian refineries. Higher shipping costs could further raise delivered diesel prices in Europe, Africa and Latin America. The IEA expects lost diesel stocks to remain unreplenished beyond normal seasonal changes until the second half of 2027. A G7 pledge to release up to 100 million barrels of emergency stocks appears, according to an internal document seen by Euronews, to cover outstanding barrels from an earlier pledge rather than provide additional supply. The IEA has reduced its forecasts for oil-demand growth, citing high prices and weaker economic growth. OPEC is less pessimistic about 2027 demand, despite cutting its 2026 growth estimate. The IEA cautions that unresolved conflicts could bring further market turmoil before a possible surplus emerges in 2027.

Italian Prime Minister Giorgia Meloni criticized the reported Trump-Putin agreement to purchase Russian diesel, calling it “a very risky choice” that legitimises Moscow while Russian attacks continue against Ukrainian cities. Speaking to Parliament ahead of a European Council meeting in Brussels, she argued the deal could weaken sanctions and undermine pressure intended to bring Vladimir Putin to negotiations. Meloni said Russia was trying to provoke Europe and divert attention from the course of the war, and maintained that Italy’s support for Ukraine would not change. Ukrainian President Volodymyr Zelenskyy thanked Meloni for recognizing Russia as the aggressor and supporting a dignified, lasting peace. In a separate interview in the United Kingdom, he said it was painful that US President Donald Trump appeared to choose a different side. The article connects that remark to alleged shortcomings in US Starlink’s cooperation in providing data about incoming Russian missiles. Moscow responded sharply: Foreign Ministry spokeswoman Maria Zakharova said Meloni’s comments were none of her business. Meloni also called for a more coordinated European role in any negotiations. She said France, Germany and the United Kingdom should negotiate on behalf of all EU members if they proceed in the E3 format, and urged the bloc’s 27 countries to appoint a respected representative with a shared mandate. She said Italy was open to alternative arrangements if leaders could not agree on a person. The article also notes divisions within Meloni’s governing coalition. Meloni defended her government’s Ukraine policy as consistent with its election programme, while Deputy Prime Minister Matteo Salvini objected to sending Ukraine billions of euros indefinitely as gifts rather than loans. Salvini also pointed out that other EU countries, including Belgium and Spain, buy Russian energy and gas.

US President Donald Trump said Taiwan had agreed to purchase 30% of the liquefied natural gas (LNG) produced by a proposed Alaska pipeline project. Speaking at a rally in Alaska on October 13, Trump did not clarify whether a final agreement had been signed or provide details of its terms. Commerce Secretary Howard Lutnick said Taiwan had committed US$4.4 billion to the project’s development. Taiwan’s economy ministry did not immediately comment, while Premier Cho Jung-tai said the government’s responsibility was to stabilise and strengthen the resilience of the island’s energy supply. The remarks follow Taiwan’s February announcement that it intended to increase US natural gas purchases to about one-third of its imports in 2026, while reducing purchases from other countries. Taiwan’s state energy company CPC signed an agreement in 2025 with Alaska Gasline Development to buy LNG and invest in the pipeline. Alaska’s governor said Taiwan had also signed a letter of intent to purchase 6 million metric tons annually. At the time, President Lai Ching-te said the investment would support Taiwan’s energy security. The proposed Alaska LNG project could export up to 20 million tons a year. It has agreements covering 13 million tons annually with buyers in Asia and France’s TotalEnergies, and needs agreements for a further 3 million tons that can be made binding to secure financing. The project would provide a direct route for US LNG to Asian markets, avoiding the Panama Canal or the longer journey around Africa and potentially reducing transit times and costs. Taiwan has pledged to sharply increase US purchases, including energy, amid US concern over its trade surplus. Trump also said South Korea had agreed to invest in the project, but Seoul said that commitment was not yet settled. The article notes that, as with the South Korean investment, the status and terms of Taiwan’s reported arrangement remain unclear.