Pulling all levers to cool diesel prices
USO•President Donald Trump announced a deal under which Russia will resume some diesel exports, but the volumes over three months equal roughly 12 hours of global diesel consumption. Oil prices slipped less than 1% to about $104 a barrel, while US wholesale diesel prices fell 2.5% to $4.60 a gallon.
1. Limited diesel shipments
Trump announced a deal with Russian President Vladimir Putin for Russia to resume some diesel exports after suspending them in July following Ukrainian strikes on its refineries. The US administration also lifted some sanctions to facilitate the shipments, drawing criticism from Republican and Democratic politicians. The announced volumes over the next three months amount to roughly 12 hours of global diesel consumption.
2. Prices and regional risks
Trump also announced an energy ceasefire between Russia and Ukraine that he said took effect immediately, though it was unclear whether either side had agreed. Oil prices slipped less than 1% on Monday to around $104 a barrel, and US wholesale diesel prices dropped 2.5% to $4.60 a gallon. In the Middle East, attacks by Yemen's Houthis on Riyadh's international airport killed at least 14 people, while Iranian forces continued striking tankers near the Strait of Hormuz.
3. Other energy developments
Middle Eastern crude oil flows remained fairly robust, while LNG exports from the region remained extremely limited. US producers in the Gulf of Mexico shut in about 1.5 million barrels per day of oil production and 1.3 billion cubic feet per day of natural gas ahead of Hurricane Isaias. TotalEnergies is expanding its US joint venture with KKR with a renewables portfolio valued at $1.2 billion, covering three utility-scale solar assets in Texas and Ohio.
