U.S. retail diesel averaged $6.28 per gallon — roughly 70% higher than a year ago — even as the Trump administration unveiled a deal with Moscow that could release up to 4.8 million tons of Russian diesel into global markets before April 7, 2027.

President Donald Trump said Friday that Russian President Vladimir Putin agreed to immediately ship more than 300,000 tons of diesel to U.S. and global buyers, with another 500,000 tons due in November and 1 million tons to follow shortly thereafter. A further 3 million tons could enter markets depending on the condition of Russian refineries still operating despite Ukrainian drone strikes.

"Between our TOTAL CONTROL of the Strait of Hormuz, and this great announcement on Russian Energy, Diesel Prices for Americans and, indeed, the World, will be COMING DOWN, IN RECORD NUMBERS, AND FAST!" Trump wrote on Truth Social.

What does the Treasury authorization cover?

The U.S. Treasury's Office of Foreign Assets Control issued General License 135 on Friday, temporarily permitting transactions involving Russian-origin diesel that would otherwise fall under specified U.S. sanctions programs. The license runs through April 7, 2027 and covers the sale, delivery, offloading and importation of Russian diesel — including cargoes bound for the United States.

The license does not authorize debits to accounts held at U.S. financial institutions by Russia's central bank, the National Wealth Fund or the Ministry of Finance. Treasury did not name shipping operators, vessel classes or specific trade lanes, and Trump did not specify how much of the announced tonnage will reach U.S. ports.

Why are diesel prices near record highs?

U.S. retail diesel climbed to $6.28 per gallon, up roughly 70% year-on-year, according to Reuters. Two supply shocks are driving the spike:

• Ukrainian strikes on Russian oil refineries have cut Moscow's refining capacity and constrained exports of diesel and other middle distillates since 2022.
• Disruptions linked to the war with Iran have tightened global oil supply, pushing freight and insurance costs higher across Middle East energy corridors.

Trump on Monday pointed to the Russian refinery outages, rather than conditions in the Strait of Hormuz, as the dominant driver of U.S. fuel prices. The administration has framed the new Russian diesel agreement as direct relief for trucking, agriculture and the broader movement of goods through the U.S. economy ahead of November's midterm elections.

What are the shipping risks in the Persian Gulf?

The diesel announcement comes as commercial traffic through the Strait of Hormuz remains under fire. A commercial vessel was struck by a projectile inside the Persian Gulf on Friday, sparking an onboard blaze — the second reported attack on shipping inside the Gulf within three days.

Even where traffic lanes remain technically open, war risk premiums, higher insurance costs and the prospect of further strikes deter owners and charterers from fixing tonnage through the region. Trump has linked the Russian diesel deal to his broader posture on Hormuz, asserting U.S. control of the waterway while commercial operators continue to absorb the operational risk.

What it means for shippers and carriers

For U.S. refiners, distributors and bunker buyers, General License 135 opens a fresh compliance path for Russian middle distillates. The volumes Trump outlined — potentially 4.8 million tons over the coming months — represent a meaningful injection into a market that has priced diesel at near-record levels.

For tanker owners, the deal could revive Atlantic Basin and Baltic-to-U.S. Gulf diesel flows at a moment when the redirection of Russian barrels to non-Western buyers since 2022 has constrained Aframax and MR product tonnage. War risk insurers remain the swing factor: any sustained attacks around Hormuz or the Persian Gulf could keep extra insurance loading on laden voyages and erode the price benefit at the pump.

Whether the announced volumes translate into lower U.S. retail diesel before the November midterms remains uncertain. Russian supply commitments, refinery throughput inside Russia, the trajectory of Ukrainian strikes on Russian energy infrastructure, and the security picture in the Persian Gulf will together determine how much of the 4.8 million tons actually reaches U.S. and European distribution networks through April 2027.