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A new pact that calls for Russia to boost the U.S. supply of diesel over the next few months is unlikely to make a dent in painfully high prices at the pump or elsewhere, energy policy experts say.<\/p>\n
President Donald Trump announced Friday that he had struck a deal<\/a> with Russian President Vladimir Putin to immediately supply the U.S. more than 300,000 tons of diesel. That would be followed by an additional 500,000 tons in November, then 4 million more tons at some point after that.<\/p>\n The deal marks a stark reversal of policy by the U.S., which from the start of Russia\u2019s war with Ukraine had banned imports of Russian oil, and comes at a time when the U.S. economy and consumers are being squeezed by a global rise in oil prices due to the eight-month-long U.S. war with Iran<\/a>. <\/p>\n The price of diesel has shattered records<\/a> in recent weeks, ratcheting up inflation for a broad swath of consumer goods.<\/p>\n The national average for a gallon of diesel in the U.S. hit a record high of $6.53 on Sept. 22, according to motor club AAA. It averaged nearly $6.28 a gallon on Friday, up from almost $3.68 this time last year. Diesel prices have hit records in Europe, too.<\/p>\n Higher diesel prices mean more expensive transportation for a long list of everyday goods. That\u2019s because diesel is used for many freight and delivery networks. And some businesses have already passed along steeper costs to consumers in the form of added fees on online orders<\/a> and packages in the mail<\/a>.<\/p>\n Shoppers may feel more and more sticker shock, particularly in the grocery aisle. Perishable foods, like meat and produce, face one of the most immediate strains of expensive diesel because they need to be hauled in and restocked frequently \u2014 or may be harvested using farm equipment powered by the fuel.<\/p>\n That\u2019s turned up the heat on Trump and the Republican Party to address surging prices<\/a> ahead of the Nov. 3 midterm elections<\/a>. The president\u2019s approval ratings on the economy have hit a new low, according to an AP-NORC poll<\/a> released last week, as the Iran war and his trade battles have increased U.S. prices for oil and other goods.<\/p>\n Energy policy experts on Friday expressed doubts that a boost in diesel supply from Russia will have a significant impact on oil prices, whether in the U.S. or globally.<\/p>\n \u201cIt\u2019s kind of shuffling deck chairs on the Titanic,\u201d said Michael Lynch, distinguished fellow at Energy Policy Research Foundation, a nonpartisan research institution focused on energy and economics.<\/p>\n \u201cIf we get diesel from Russia, basically it means that their existing customers are not going to get it and they\u2019ll have to go somewhere else, and that will keep the price basically where it is now,\u201d Lynch said.<\/p>\n And while the White House may be counting on this move to give some relief at the pump for U.S. truckers, ranchers and farmers who have been hit hard by rising diesel prices, that\u2019s not a given.<\/p>\n \u201cThe best you could hope for is a tiny dip in prices locally in places like the New York-New Jersey area, Philadelphia maybe,\u201d Lynch said. \u201cIt just means that the oil is just going to be shuffled around and it\u2019s not really going to change the price globally or across the U.S.\u201d<\/p>\n If Russia, which in July moved to ban diesel exports due to Ukrainian drone strikes on its refineries, now believes it is able to resume exports of diesel, then that will help stabilize global diesel prices, said Daniel Sternoff, senior fellow at the Columbia Center on Global Energy Policy.<\/p>\n However, prices are likely to remain elevated overall because a lot of refining capacity in the Middle East isn\u2019t available to the world market due to the disruptions in the Strait of Hormuz from the ongoing U.S.-Iran war.<\/p>\n \u201cRefined products like diesel are still barely half of prewar levels,\u201d Sternoff said. \u201cSo, even if there were to be some follow-through from the Russians to put a little extra diesel into the world markets, it might take the edge off of prices, but it will not substantially lower them.\u201d<\/p>\n While the deal between Trump and Putin probably won\u2019t have much of an impact on prices for diesel consumers in the U.S., it will benefit Russia, said Clayton Seigle, an energy strategist and expert at the Center for Strategic and International Studies.<\/p>\n That\u2019s because Russia is trying to offload its summer-grade diesel for the heavier winter and arctic grades that they will need in the coming months, Seigle noted.<\/p>\n \u201cI don\u2019t think it\u2019ll be enough to materially lower prices in the United States or Europe, but it does certainly let Moscow off the hook in terms of revenue squeeze,\u201d he said.<\/p>\n<\/div>\n