Why Trump is buying Putin’s diesel

President Trump just tweeted there's now an "immediate energy ceasefire" between Moscow and Kyiv, after yet another Putin phone call over the weekend saw Trump ease US sanctions to allow Russian diesel back out into world markets, all in hopes of curbing pump prices.

Lots to chew on there, so let's snap off a chunk via the four biggest challenges to Trump's big new deal, starting with...

1. 🇺🇦 Ukraine didn't know about it

The US president's ceasefire announcement insisted "both parties have agreed!", even though it was all apparently news to Ukraine’s Zelensky. Still, Zelensky is clearly used to Ukraine (rather than its invader) copping blame as the obstacle to peace, and he responded the usual way: we'll comply if Putin does.

So okay... what has Putin said? Nothing, beyond then hitting Ukraine's CHP-5 power plant in Kharkiv, plus flattening a grocery store (at least three dead, dozens injured). For his part, Zelensky hasn't hit Putin's energy assets since Trump's tweet, pivoting to data centres instead (frying three major Yandex hubs in four days).

Anyway, it seems Putin is ignoring (like he did last month) President Trump’s latest surprise "energy ceasefire". But speaking of the man in the Kremlin...

2. 🇷🇺 Putin's diesel promise is tiny

Trump's shock deal to allow Russian diesel came with some splashy numbers, like 4.8M metric tons with an immediate hit of 300k. But these sorts of announcements must be banking on nobody firing up the ol' Google and twigging that a 300k release only supplies the US for a grand total of... 13 hours?

The whole package — spread over six months — would only get the US through another week or so. That's why the initial tweet triggered a ~4% drop in diesel futures, before mostly evaporating once traders actually crunched the numbers.

And yet, even at these low numbers...

3. 🛢️ Putin might struggle to deliver

Ukraine has already knocked out a third of Russia’s refining capacity (including another hit right after Friday’s sanction relief), so Putin has now had to…

• a) ban diesel exports since July

• b) impose daily purchase caps

• c) lower Russia's quality standards, and even...

• d) start importing diesel from Belarus and elsewhere.

So while Russia is still able to cover its domestic diesel needs for now, all the refinery damage and supply pressure will curb how much surplus Putin can actually release.

And yet, even if this whole pledge is thinner than a late-stage contestant on Alone...

4. 🇺🇸 The deal shreds US cred

It's barely 24 days since President Trump signed the bipartisan bill threatening crippling tariffs on anyone (China and India) financing Putin's wars via energy purchases. And yet here we are, a week before that new law even enters force, and DC is already carving out an exemption!

It's not just a general hit to DC's brand, but a specific hit to its bargaining power: whether friend or foe, folks take each ultimatum less seriously with each new TACO.

So then, if this deal is so flawed, why even do it?

Each sitting US president has lost House seats in 18 of the last 20 midterms. So Trump was already facing an uphill battle before his administration oversaw gasoline going above $4, diesel above $6, and mortgages above 7%. He's now got the lowest pre-midterm approvals in (eg) WSJ polling history, back to 1990.

So that's realistically where this deal comes in: trying to reframe US domestic gas inflation as Ukraine's fault. The trouble is, Ukraine's Zelensky now enjoys better US polling than Trump himself, so it's hard to see how dunking on the guy helps.

Meanwhile, why would Putin do this deal? It's obvious, but we'll spell it out anyway: without making a single real concession, Putin now gets US sanctions relief, another US-Ukraine wedge, plus another round of the "it's Ukraine's fault" agit-prop, not to mention a critical pressure valve for Putin’s own dwindling storage tanks (when they reach capacity, Putin has to curb production).

Sweet deal.

Sound even smarter:

• The Financial Times has reported European defence firms are ramping up personal security for their executives amid intel agency warnings that the Kremlin is stepping up its assassinations.

• The volume of missing Gulf diesel is ~three times the volume of missing Russian diesel. We wrote about the impending ‘diesel disaster’ here.