by Kenneth R. Timmerman
Global diesel prices depend on global supply and demand - a concept that doesn't translate into Democrat talking points.
President Trump has come in for tough-worded criticism from a handful of Republicans in the Senate, who joined all 47 Democrats to blast his plan to allow Russia to export diesel fuel to the world market.
Senator Thom Tillis, the outgoing Republican senator from North Carolina, blasted Trump for cozying up to Putin, stealing a theme normally favored by Democrats.
In an October 13 letter to the President co-signed by four Republican and six Democrat senators, Tillis wrote that lifting U.S. sanctions on Russia’s diesel exports “only provides Putin with more fuel to finance his war machine” and could ultimately “endanger servicemembers operating overseas” in the war with Iran.
The letter also claimed that allowing Russian diesel exports “will have a negligible impact on fuel prices.”
But less than a week after the policy was announced, diesel in the U.S. dropped from $6.53 per gallon to an average of $6.179 per gallon, according to the U.S. Energy Information Administration.
Tillis chose to retire rather than face a Trump-backed primary opponent after he voted against the Big Beautiful Bill last year and has been an outspoken critic of the president ever since.
Democrats screamed that the deal showed that “Donald Trump is cozying up to Putin and striking self-enriching deals instead of standing with Ukraine,” introducing legislation that would prevent any U.S. imports of Russian diesel.
But the United States is a net exporter of diesel, producing on average 5 million b/d while consuming 3.9 million b/d, according to the U.S. Energy Information Administration. So significant imports of Russian diesel are unlikely.
The October 9 deal calls for Russia to release 300,000 metric tons of diesel onto world markets immediately, and more than ten times that (3.5 million metric tons) by the end of the year. That translates into around 26 million barrels.
Tillis and his Democrat friends argue that the amount of new Russian diesel coming onto the market is negligible, since those 26 million barrels amount to around a week of total U.S. diesel consumption.
But they conveniently neglect the fact that diesel prices are not set in the United States but globally. Put simply, global diesel prices depend on global supply and demand—a concept that doesn’t translate into Democrat talking points.
Increasing global supply with Russian diesel will inevitably lower world diesel prices.
First of all, while 26 million barrels may amount to a week of U.S. diesel consumption, it equals more than three weeks of U.S. excess diesel export capacity.
That amount of additional diesel on world markets will replace nearly half of current losses due to the Ukraine and Iran wars.
Ukrainian attacks on Russian refineries have reduced production by 25 percent to 33 percent since March 2026, according to reliable estimates. Ukrainian estimates of the damage are even higher.
The International Energy Agency believes that the Russian losses, combined with those caused by Iranian attacks on refineries in the Gulf, have taken 1.3 million b/d of refined diesel from the market.
That’s why prices are so high. Iran and Ukraine have reduced supplies.
Global diesel prices jumped when the president floated the idea in September of cutting off U.S. diesel exports. Why? Again, because the price of diesel at the pump is determined by global markets, not just ours.
“The United States produces more diesel than it consumes and exports the rest,” the American Petroleum Institute reminded us at the time. “Limit those exports and the surplus has nowhere to go but storage. Once the tanks start to fill, a refinery’s only option is to process less crude, which means less gasoline and jet fuel, too.”
So, if we cut our own diesel exports, in short order U.S. refineries will start producing less diesel and the price of diesel worldwide will increase. Once again, it’s supply and demand.
And then, there’s the U.S. oil paradox.
U.S. refining capacity has dropped by more than 250,000 barrels per day since last year, according to the Energy Information Administration.
The newest large U.S. refinery was built in 1977. Since then, the enviro-wackos have succeeded in blocking new permits.
Our existing refineries are running at 95–98 percent capacity. Simply put, we have no spare capacity to draw on to lower prices.
Seventy percent of America’s refineries were built to process sour (i.e., high sulfur) crude. Why? Because that’s what the U.S. produced—until recently.
The shale revolution of the 2000s changed all of that. We now produce massive amounts of light sweet crude and export 4 million barrels of it every day because we don’t have the refineries to process it. Sweet crude becomes gasoline and ultra-clean diesel.
Sour crude gets “cracked” into heavy residual fuel oil, asphalt, and dirty diesel. And that’s what our refineries produce.
Where do we get the sour crude? We import it from Canada, Venezuela, Mexico, and Saudi Arabia. Before the Ukraine war, we imported small amounts from Russia as well.
Although we are the world’s largest oil producer, at 13.8 million barrels per day, we import 6.2 million barrels per day because of that refinery mismatch.
By the way, that explains why Trump’s deal to get control of Venezuelan oil makes so much strategic sense. Our refineries were designed for heavy Venezuelan crude.
And then, there is China. Do you think they are our friends?
The Chinese now have greater refinery capacity than the United States, nearly 19 million barrels per day, the world’s biggest.
But unlike the U.S., the Chinese are running their refineries well below capacity, at around 73 percent to 74 percent.
And it’s not the Chinese refiners who determine how much they will produce: it’s the government. They turn on and off the tap as it benefits China. And clearly, they see that restricting the production of distillates hurts the United States far more than it does China and its allies, Iran and Russia.
So what the President and his key advisers—Scott Bessent at Treasury, Chris Wright at Energy, and Marco Rubio at State—have done is position the United States to dominate world energy markets for many years into the future. They are deleveraging Russian and Iranian oil while ensuring decades of Venezuelan oil for U.S. refineries.
This is big-picture geopolitics.
Photo: 30 April 2026, Mecklenburg-Western Pomerania, Rostock: Tanks and pipelines in the oil port of Rostock. The port is one of the alternative supply routes for the PCK refinery in Schwedt, Brandenburg. Crude oil is landed there by tanker and transported via a pipeline. The background to this is Russia's announcement that it will no longer be transporting Kazakh oil to Germany via the Druzhba pipeline from May. Photo: Bernd Wüstneck/dpa (Photo by Bernd Wüstneck/picture alliance via Getty Images)
Kenneth R. Timmerman was a Nobel Peace Prize nominee in 2006. He is the author of The Iran House: Tales of Revolution, Persecution, War, and Intrigue, and thirteen other books of non-fiction. His website is kentimmerman.com.
Source: https://amgreatness.com/2026/10/22/the-oil-paradox/
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