Trump's diesel deal with Russia is unlikely to significantly lower global fuel prices despite expectations of rapid relief

Trump's diesel deal with Russia unlikely to lower global fuel prices

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According to DW News, the US benefits from high diesel prices as the world's largest diesel exporter. However, domestic consumers are feeling the strain of rising living costs.

Experts interviewed by DW assess that diesel prices on global markets are unlikely to fall significantly anytime soon, regardless of the deal between US President Donald Trump and Russian President Vladimir Putin.

The main reason for high diesel prices is the war in Iran and the disruption of shipping through the Strait of Hormuz and the Bab al-Mandeb Strait, said Samina Sultan, a foreign trade expert at the German Economic Institute (IW) in Cologne.

The situation has led to production outages and made fuel shipments 'more expensive, less secure and more difficult,' Sultan said. Trump's deal with Russia also has an additional geopolitical dimension, Sultan said: 'It causes the wars in Ukraine and Iran to become completely intertwined.'

Roughly 13.5 million barrels of crude oil are once again flowing through the Strait of Hormuz a day, according to shipping and commodities analytics firm Kpler. However, volumes of refined products such as diesel remain far lower at around 677,000 barrels per day, compared with 3.6 million barrels before the war.

Carsten Fritsch, a commodities analyst at Commerzbank, also attributes the price increases to the wars. 'If nothing changes in Ukraine and the Middle East, I see very few ways to resolve these supply bottlenecks,' he said.