Russian refineries in crisis. Putin’s bluff at Trump’s expense

With millions of tonnes of diesel, Vladimir Putin has promised Donald Trump something that Russia will not be able to deliver. The bluff is obvious: Russian refineries are under pressure, Ukrainian attacks have reduced production capacity, and Moscow has even been forced to import fuel from abroad. Yet Trump has presented the deal with the Kremlin as a breakthrough to bring down prices at the pump in the United States. Putin has thus achieved the result he was really after: manipulating the American president, exploiting his quest to regain popularity and fuelling the rift with Volodymyr Zelensky. Even before a single tonne of diesel has crossed the Atlantic, Moscow has already claimed victory.

According to the US President, Russia would immediately supply around 300,000 tonnes of diesel to the US and global markets ahead of the November mid-term elections, with further deliveries to follow. Converted into barrels, these quantities amount to just over 2 million immediately, and then over 30 million. Putin, in his public statement, was far more cautious: he confirmed Russia’s willingness to supply oil and refined products, without, however, specifying quantities, deadlines or delivery arrangements. The difference is significant: Trump announced a detailed agreement, whilst the Russian president did not publicly confirm the more binding terms.

To grasp the scale of the pledge, one need only compare it with that of the G7 summit in early October. The group’s member countries agreed, through the International Energy Agency, to a coordinated release of 100 million barrels of oil and refined products over a four-month period, with a significant proportion of diesel to be made available within the first twenty days. This is a significantly higher volume than that announced with Russia. Yet even the G7 agreement failed to slow the rise in energy prices.

For months, Ukraine has been targeting Russian refineries and energy infrastructure. Production capacity is under pressure, exports of petroleum products have fallen, and Moscow has introduced restrictions on overseas sales to stem domestic shortages. Data from the Centre for Research on Energy and Clean Air illustrate just how serious the situation is. In August, revenue from Russian seaborne exports of petroleum products fell by 32 per cent compared with the previous month, reaching its lowest level since the full-scale invasion of Ukraine. Meanwhile, Russian purchases of fuel from abroad rose to 172,000 tonnes, more than seven times the previous monthly high since the start of the invasion. A country that was once among the world’s leading exporters of refined products has been forced to buy fuel from South Korea and to repurchase from India petrol produced from its own crude oil. This picture is at odds with the image of a supplier capable of rapidly flooding the world market with millions of additional tonnes.

Moreover, if part of Russia’s supplies were diverted to the United States, Moscow’s current customers would have to turn to other producers. The diesel would change destination, without necessarily increasing global supply. The result could be a redistribution of trade flows, not a lasting reduction in prices.

Putin, however, does not need to deliver the diesel immediately to achieve a result. The announcement has already enabled the Kremlin to present itself as an indispensable partner in resolving the energy crisis and to secure a temporary easing of US restrictions on imports of Russian fuel. This is an advantage for Moscow, which is seeking to maintain the energy revenues with which it is financing the war against Ukraine. The promised diesel is highly unlikely to arrive in the volumes and within the timeframe announced by Trump: the crisis affecting Russian refineries makes this prospect unrealistic. The bluff, however, has already worked on a political level. Trump has sold the American public an energy victory before there is any evidence of deliveries and has turned Putin into a partner to be rewarded, whilst treating Zelensky as an obstacle. If the fuel does not arrive, the United States will be left with prices that remain high and a relationship with Kyiv that is further strained. KGB-style disinformation has taken root right inside the White House. Putin could not have hoped for a better outcome.