Kyiv's Sensible Strategy

After November 3, few people will remember the “diesel deal.”

Relatives are rushing over, shouting: “Oh no, oh no, Trump has lifted sanctions on Putin (the diesel deal)!”

Of course, we need to wait and see the details—how this will play out in practice… But since my relatives are worried, I’ll share my preliminary opinion.

There’s nothing to worry about in the diesel deal so far (except for the feeling that I’ve eaten something bad, but with Trump, that’s often the case).

Russia produces about 85 million metric tons of this very diesel fuel and exports about a third of it. Note! It already exports it—to Turkey, Brazil, and other places. In other words, it sells it on global markets. Currently, a significant portion of export shipments has been suspended due to the fuel crisis in Russia and the harvest season. Importantly, the bulk of shipments to the U.S. are scheduled for November and beyond (domestic diesel consumption in Russia will already have fallen as the harvest season ends).

And we’re talking about roughly 2 million metric tons for now. Most likely, selling diesel to the U.S. instead of Brazil—that is, to a premium market—will result in a price premium. I don’t know, maybe 10%. But for a volume of 2 million metric tons, that’s not very significant.

Why does Trump need this deal? It’s an election-year move—there are three weeks left until the U.S. midterm elections, and Trump’s position is dire. He needs bold moves—the more scandalous the move, the stronger it is; it’s important to shift the focus away from Trump’s failures regarding Iran.

Why does Putin need this? To sour Trump’s relations with Zelenskyy and Europe (which, just like Zelenskyy, will condemn the deal). And to try to use it as leverage—so that Trump would pressure Zelenskyy to limit Ukrainian strikes on Russian oil refineries.

And this is a crucial point. If Zelenskyy agreed to limit the strikes, it would be a significant loss for Ukraine. If not, these shipments could even result in additional inflationary pressure within Russia—and do more harm than good to its economy.

In principle, a sensible strategy for Kyiv under these circumstances is to to step up strikes on Russian oil refineries (this works), but after each strike to declare that Trump is a great president and deserves not just one Nobel Peace Prize, but three—over the next three years. Or eight—equal to the number of military conflicts he has halted.

But this won’t last long. After November 3 (the midterm elections), I suspect few will remember the deal. The price of diesel in the U.S. and its global price are determined by its availability on the world market. The fact that some of the tankers headed for Brazil will change course to the U.S. won’t change it much.

Kirill Rogov, Facebook

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