Making Sense Of Trump Deals To Lower U.S. Diesel Prices

Originally published on Forbes.com on October 26, 2026

President Trump’s diesel deal appears to be too little, too late, and too contentious to reduce the price of diesel in the U.S.

I’m visiting Kansas right now. The state is a politically red farming state, with corn, soybeans, and winter wheat alternating through the year. The farmers whom I play pickleball with are concerned about the lack of market for soybeans, and the upswing in the price of diesel and fertilizer. In fact, two weeks ago President Trump visited Kansas to try to allay the discontent.

Kansas farmers are puzzled by many and varied attempts by the administration to get around the upswing in prices. Brent oil has risen from $71 before the Iran war to over $110 on Friday, and caused an attendant upswing in national average U.S. retail prices of regular gasoline (from $2.98 to $4.28/gallon) and of diesel (from $3.76 to $6.28/gallon) according to AAA.

One farmer surprised me when he said the fertilizer price was killing him—more than the price of diesel—because one, just one, of his fertilizers cost more than a million dollars this year. Up to 30% of world shipments of fertilizers used to come through the pre-war Strait of Hormuz.

Recent interventions, like the government’s goal to get companies to buy sanctioned oil tankers, are a bit confusing. How is this likely to lower diesel and fertilizer prices for Kansas farmers? Let’s take a look at the drivers of global price change for diesel.

The First Diesel Price Jump

To add perspective, we can look at other numbers that relate to the world price and U.S. price of diesel. Remember, diesel is made by refining crude oil. The obvious one is the Iran war and the blockade of the Strait of Hormuz, which began in February 2026. Before the war, about 25% of seaborne oil and 20% of LNG (liquefied natural gas) flowed through the Strait of Hormuz.

In 2024, 84% of crude oil and condensate shipments through the Strait were delivered to Asian markets, with China receiving a third of its oil via the Strait. Oil delivered via the Strait was about 20 MMbpd (million barrels per day), before it dropped and then rebounded to 14 MMbpd as of mid-October, 2026. However, oil transferred by alternative means, such as pipelines, has restored to pre-war numbers the total supply from the Gulf countries to pre-war numbers.

The supply of LNG from the Gulf has not been restored. All of the LNG exports from Qatar and the UAE come through the Strait of Hormuz. Qatar is currently the world’s second-largest LNG exporter (the U.S. is the top exporter). 90% of the pre-war LNG that flowed through the Strait went to Southeast Asia, including China, S. Korea, India, and Pakistan. The rest of the LNG (10%) went to Europe. LNG exports from the U.S. have roughly doubled to help alleviate the current energy crisis in Southeast Asia, and this has pressured U.S. supplies to Europe. While this is important, note that LNG is not the same as the diesel required for long-haul transport and agricultural machinery.

US diesel price by year 2023-2026. Source: Getty

Another Diesel Price Surge.

After the United States and China, Russia has been the world’s third-largest producer of refined oil products. Since the Iran war, another critical event has affected the price of diesel. Ukraine has intensified drone attacks on Russia’s refineries that make diesel from crude oil. In June of 2026, refinery output has been cut to 30% below a year earlier, its lowest level in 20 years. Exports of Russian diesel have been cut down to 740,000 bpd—a 26% cut.

China also cut its diesel exports, but in response to the Iran war. Together, export cuts of diesel by Russia and China have driven the price of diesel even higher.

A Side Deal To Lower Diesel Prices.

But around 11 October, President Trump announced on his social media platform a surprising deal with Vladimir Putin. The deal would allow Russia to supply diesel “to the American and global marketplace”.

Trump said the Russian supply would include:

• 300,000 tons “immediately”; then 500,000 tons next month; followed by
• 1 million tons “immediately thereafter”; and then 3 million tons “within a short period of time”.

Soon after this, Russia announced it had lifted its ban on exporting diesel.

This deal was a surprise to President Zelensky of Ukraine. And it was a surprise to Republicans in the U.S. Congress who had passed a new sanctions bill only last month. Trump had signed the bill into law, calling it the Lindsey ⁠O. Graham Sanctioning Russia and Iran Act of 2026. There’s the rub—instead of imposing sanctions via the Lindsay Graham Act, Trump has lifted sanctions on exports of diesel, and Russia is using these export revenues to fund the war in Ukraine.

This conflict has motivated a group of U.S. Republican senators, Susan Collins, Lisa Murkowski, Thom Tillis and John Curtis, to dissent. They were joined by two Democrats and sent a statement that disagreed with the diesel deal and rebuked the president. The letter claimed that the president should have consulted with Congress first, and that the deal “should not provide Putin with a financial lifeline while Russia continues to kill Ukrainian civilians.” 

As a practical matter, experts told ABC AU News that summing all the diesel delivery numbers listed above would amount to only 12 hours of global supply, and hence the diesel deal would not make much difference.

Finally, there are potential conflicting incentives in the diesel deal. The deal has been interpreted as a means to lower diesel prices in the U.S. before mid-term elections, which will take place in early November. High transport diesel prices do raise costs of food and other goods, and this rising inflation is becoming a general concern in the U.S., not only for Kansas farmers.

Takeaway.

President Trump’s diesel deal has arisen due to the failure of one big deal with Iran to settle the Iran war. The numbers suggest that a direct focus on finding a way out of the original Iran quagmire might hold more promise than inventing new diesel deals that might or might not reduce the price of diesel and fertilizer in the U.S.