Global Diesel Crisis and Geopolitical Implications

From the Strait of Hormuz to global markets.

The energy crisis does not stop at crude oil, the Al-Aqsa strike has hit

refined products, especially diesel,

the lifeblood of transport, industry, and agriculture. And the bottleneck begins

at refineries, where crude is turned into diesel.

In the Gulf, the U.S.-Iranian war has disrupted shipping in

Hormuz and threatened refineries and oil facilities.

In Russia, Ukrainian drones are striking refineries

one after another. The world consumes up to

30 million barrels a day of diesel

and other fuels. According to the International Energy Agency,

the global diesel shortage reaches two million

barrels per day. In the United States,

diesel hit its highest price levels in September,

according to the U.S. Energy Information Administration.

Today, the average price per gallon remains above six

dollars, an increase of nearly 67 percent

compared with last year. In California,

the price exceeded eight dollars per gallon. These prices

directly impacted transport and production costs

and caused additional pressure on President Donald Trump's administration

weeks before the congressional midterm elections.

Trump turned to Moscow in search of a solution. Here

the energy crisis became a factor in the

geopolitical calculations between Washington and Moscow. After

a phone call with Russian President Vladimir Putin on October 9,

Trump announced an agreement to supply Russian diesel

to US and global markets.

The Treasury Department soon temporarily lifted sanctions

imposed on Russian diesel until April 2027,

while Moscow announced it would begin lifting its export ban

imposed in July and extended at the end of

last September. The agreement included

Moscow immediately pumping more than 300,000 tons,

then 500,000 tons in November, followed by

an additional million. The other three million

are contingent on the condition of Russian refineries.

The total is about five million tons, or

equivalent to about 36 million barrels of

diesel over the coming months. This

U.S.-Russian agreement could ease pressure in diesel markets

and give the Kremlin financial breathing room amid questions

about Moscow's ability to fill the global gap, especially in

light of Kyiv's attacks on its refineries, attacks the

Ukrainian president ignored U.S. requests to stop,

according to a U.S. official speaking to Axios. A

U.S.-Russian agreement shifts the diesel crisis from an economic

context to a broader geopolitical one, where

the crisis becomes a driver of the course of U.S.-

Ukrainian relations. After the Ukrainian president expressed anger over

President Trump's move, and the U.S. president went so far

as to demand the Ukrainian president's departure, this raises

questions about the shift in U.S. involvement in the Russian-

Ukrainian confrontation, and how this shift will affect the United

States' management of the political negotiating track,

and thus its view of the conflict and its outcome.