·
US
Diesel Prices Remain High: The AAA national average diesel price
stood at $6.32 per gallon
on 19 October 2026, compared with $6.28 on 9 October and $3.63
in January 2025.
·
Congressional
Sanctions Bill:
The Lindsey O. Graham Sanctioning Russia Act of 2026, introduced on 18 September, envisaged:
o Financial, investment and travel sanctions
against Russian officials and businesses.
o 500% tariffs on US imports from Russia, mainly
fertilizer, plywood and specialty metals.
o Possible tariffs of up to 100% on goods from countries purchasing
Russian oil and gas, potentially including China, India and
Turkey, as well as countries helping Russia evade sanctions.
·
Trump
Administration Relaxes Sanctions: According to the article, the
administration waived US sanctions on Russian diesel fuel on 9 October and
subsequently waived sanctions targeting Russian officials and buyers of Russian
energy, citing national interest.
·
Russian
Diesel Supply Has Little Price Impact: Russia reportedly intended to sell
300,000 tonnes of diesel fuel on international markets. However, US diesel
prices remained virtually unchanged, suggesting that the announced supply had
no noticeable immediate impact on retail prices.
·
Limited
Significance of Russian Diesel: The article estimates global diesel
consumption at approximately 29 million barrels daily, equivalent to around 3.9
million tonnes. The proposed Russian supply of 300,000 tonnes represents
roughly two hours of
global diesel consumption and was expected to be distributed
over several months.
·
US
Does Not Need Russian Diesel: The United States reportedly consumes
about 3.8 million barrels of diesel daily while producing approximately 4.4
million barrels. Regional shortages are supplemented by imports from Canada.
·
Reasons
for High Fuel Prices:
The article attributes elevated diesel prices primarily to high crude oil
prices, linking these to the US war with Iran and, secondarily, Ukrainian drone
attacks on Russian oil refineries.
·
Strategic
Implications: The
article argues that sanctions could increase pressure on Russia's government
and restrict funding for its war against Ukraine. It criticises the Trump
administration's decision to ease sanctions, arguing that such a policy could
weaken pressure on Russia.
The
article argues that easing Russian oil sanctions has not delivered any
noticeable reduction in US diesel prices. It questions the economic justification
for the move and contends that relaxing sanctions could undermine efforts to
pressure Russia over the war in Ukraine.
[ABS News Service/22.10.2026]
The Numbers: AAA national average of diesel fuel prices*
–
|
October 19, 2026 |
$6.32/gallon |
|
October 9, 2026 |
$6.28/gallon |
|
January 2025 |
$3.63/gallon |
*
AAA; see Department of Transportation/Bureau of Transportation Statistics for monthly
rates back to 1995.
What They Mean:
Congress’
September 18 sanctions bill — the “Lindsey O. Graham Sanctioning Russia Act of 2026”
— carried a 30-day timeline for the Trump administration to (a) impose a battery
of new financial, investment, and travel sanctions on Russian government officials
and businesses, (b) put 500% tariffs on goods Americans are buying from Russia (mainly
fertilizer, plywood, and specialty metals), and (c) an option for tariffs of up
to 100% on goods produced in the three countries buying most Russian oil and gas
(or five countries depending on your interpretation; the top three would be China,
India, and Turkey), and the top five involved in helping Russian firms and military
industry evade sanctions.
Congress’s
idea was to presumably restore financial pressure on Putin-regime officials engaged
in planning and overseeing Russia’s war in Ukraine, to penalize others within and
outside of Russia involved in sanctions evasion, and to deter purchases of oil and
gas that support Russia’s war finance. This 30-day clock tolled midnight on Sunday.
So
far, the Trump administration has done pretty much the opposite of what Congress
must have hoped. It waived the U.S.’ own sanctions on Russian diesel fuel on October
9 – so much for the “sanctions evasion” piece — and announced a Russian intent to
sell 300,000 tons of diesel fuel on world markets, presumably hoping to push fuel
costs in the U.S. down before the election, then about a month away. Then last Friday
evening it waived all the bill’s sanctions on Russian officials and on buyers of
Russian energy on claims of “national interest”.
Before
the big strategic and alliance questions this raises, two observations on the practical
implications:
U.S.
diesel fuel prices unchanged. AAA’s daily fuel-price survey had diesel fuel averaging
$6.28 per gallon as the administration announced its shift in policy on the 9th.
Last Friday their average was $6.33, and this morning it is $6.32. So the release of 300,000 tons of Russian fuel, if it has really
happened, has either not changed U.S. prices at all, or has had an effect so small
as to be unnoticeable.
The
U.S. does not need Russian diesel oil. The lack of real-world impact is not surprising,
since while “300,000 tons” would be a lot of fuel for any one person or business,
it’s very small when measured against world and national totals. According to the
U.S. Energy Information Administration, the world consumption of diesel fuel is
about 29 million barrels daily. Diesel averages 7.4 barrels per ton, so 29 million
barrels is about 3.9 million tons a day. Thus, the 300,000 tons is about 8% of daily
world diesel fuel use — about two hours’ worth – and appears to be spread out over
months. Possibly the administration is hoping Americans will buy the fuel (though
that is likely still illegal under a 2022 sanctions law), but we don’t really need
it: each day the U.S. uses 3.8 million barrels and produces about 4.4 million barrels,
and makes up any regional shortfalls by importing from Canada.
To
the more “strategic” questions: Fuel prices are high not because of any fuel shortage
but because crude oil prices are high. This in turn is mainly because of the Trump
administration’s decision to open a war with Iran in February, and secondarily Ukraine’s
successful drone-offensive efforts to target Russia’s refineries as both providers
of fuel for Russia’s occupation army — diesel is most often used by heavy vehicles
such as trucks and tanks — and sources of war financing. The sanctions bill's authors
last month hoped to supplement the pressure this has imposed on the Russian government
and so hasten the end of the war. Though we did not support the bill’s tariff authority
grant, the basic thinking is morally and strategically sound: to the degree ‘pressure’
from abroad can influence the war’s outcome, it should fall on Russia as invader
and occupier, not on Ukraine as a country defending its land and people against
an unprovoked aggressor. Appeasing the invading country, as we warned in early 2025,
most likely has the opposite effect.