[1]
By John Helmer, Moscow
@bears_with [2]
The telephone call which President Donald Trump has been trying to make to President Vladimir Putin since the morning of October 7, and which the Kremlin spokesman refused [3] to confirm each day since, was such a surprise when it happened on Friday evening, the Kremlin kept it secret from the Russian press until Trump spoke first.
Putin’s foreign policy advisor, Yury Ushakov, who has briefed Russian reporters after the presidential telephone conversations, did not appear as he usually does. He came later.
An announcement – unusually titled “A Statement by the President of the Russian Federation, Vladimir Putin” — was posted [4] by the Kremlin at 10:50 in the evening Moscow time (3:50pm in Washington, DC) to reveal the call had occurred. “During a telephone conversation with the President of the United States, Donald Trump, on October 9, considerable attention has been paid to the prospects for settlement the Ukrainian crisis, the situation around Iran and various aspects of bilateral relations. In the discussion of the state of affairs in the world energy sector the Russian side confirmed their willingness to supply oil and petroleum products to the American and global markets. I [Putin] am sure that this will have a positive impact on the entire global economy.”
Kirill Dmitriev, Putin’s advisor for negotiations with the Trump family and the US oligarchs, started a stream of celebration tweets. “President Putin and President Trump just had a successful call. Russia-US energy and economic cooperation will continue and benefit global markets and the world,” he began [5].
Dmitriev retweeted Trump’s announcement [6]: “I have just concluded a highly successful discussion with President Vladimir Putin, of Russia, wherein it was agreed that Russia will immediately supply over 300,000 Tons of Diesel Fuel to the American and Global Marketplace, another 500,000 Tons during the month of November, and 1,000,000 Tons immediately thereafter. Additionally, based on the condition of their Diesel Refineries, Russia will then deliver, within a short period of time, 3,000,000 Tons of Diesel Fuel. 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! Lower prices for Americans, especially our Great Farmers, Ranchers, and Truckers, is my Greatest Priority.”
The timing of Trump’s tweet suggests the call began at about 8:30 pm Moscow time. Ushakov says it lasted 90 minutes. The Kremlin delayed its first statement for almost an hour. Ushakov delayed for another hour.
The Kremlin and Dmitriev omitted to say if Putin’s decision to break the export ban on Russian diesel, in place since July 8, authorizes the release of diesel being held in Russia’s oil company or state strategic reserves. Dmitriev didn’t say if the tonnage for release will be measured in US imperial or metric. He ignored one of the top-secret conditions in Trump’s tweet: “based on the condition of their Diesel Refineries, Russia will then deliver, within a short period of time, 3,000,000 Tons of Diesel Fuel.”
That’s a signal that Putin told Trump to stop the Zelensky regime, with NATO and US intelligence and targeting, from striking at Russian oil refineries, port terminals and oil tankers from now until next year. Trump didn’t quite agree and promise Putin to do that. The Russian General Staff, intelligence agencies, and the Security Council aren’t sure that a Trump ceasefire order will go down the line and be enforced in Kiev.
Dmitriev then tweeted in celebration of the announcement from the US Treasury’s sanctions office (OFAC) of a new “General License 13S [7]” lifting US sanctions on Russian tankers and on China, India, Turkey and other states’ purchasing of Russian crude oil, petroleum products, gas and other commodities “through 12:01 a.m. eastern standard time, January 9, 2027.”
The OFAC wording [7] doesn’t restrict the sanctions relief to diesel. It omits to specify what Russian exports are covered by “such transactions are ordinarily incident and necessary to the day-to-day operations in the Russian Federation of such U.S. persons or entities.” Dry cargoes, like Russian coal for Turkey and grain for Egypt, which are being hit by the US-NATO-Ukrainian drone campaign on the Black Sea, appear to be covered by the new Trump scheme – if the Ukrainian drone targeting is also covered.
Dmitriev added his celebration tweet [8]: “BREAKING: New York Harbor wholesale diesel fell approximately 4.5% following the diesel supply agreement between Presidents Putin and Trump. The power of working together to stabilize markets and benefit the people.” This was misleading. US diesel prices had been falling for two weeks before Friday’s telephone call; the futures market reaction to the call was less than 3% on the day (see table and charts below).
Were the terms of Putin’s deal with Trump kept secret from the Rusian Security Council? Were the slowness of Ushakov to provide his read-out, and failure of Putin to brief reporters at the end of his visit to Turkmenistan, signs that there is deep skepticism towards Trump in public and in private?
Following the Security Council session with Putin on October 7, the communiqué [9] was unusually short and secretive: “They discussed topical issues of Russian domestic and foreign policy.” Soon after the Council’s deputy head, ex-President Dmitry Medvedev, telegrammed [10] defiance of both Americans and Europeans: “There’s no other way: to live with wolves is to howl like one.”
Putin then flew to Turkmenistan for a summit meeting of the Commonwealth of Independent (CIS) states with Iran. The diesel deal telephoned with Trump began after the President was back to Moscow. In secret, Dmitriev and Ushakov had been discussing [11] the deal with Steven Witkoff and Jared Kushner as they prepared to start talks on Friday morning in Miami with a Ukrainian delegation led by Kirill Budanov.
Minutes after the Trump tweet and Kremlin statement, Oleg Tsarev, a Ukrainian opposition leader in exile in Crimea, commented [12] on his Telegram account: “Diesel exports are now banned until October 31. The exception is Central Asia and Mongolia. All Russian diesel exports are now 12-14 thousand tons [metric] per day against 100 thousand before drone attacks. Promised to Trump 300 thousand tons is three days of previous exports and less than a day of US consumption. I don’t know where to get diesel for the United States. Perhaps, if there are no blows to the refinery guaranteed, we will have surpluses over time. But this process is not a fast one.”
An hour later, Tsarev added [13]: “Now it turns out that when Zelensky strikes at Russian refineries, he will be hitting directly at Trump’s interests. Do you think Zelensky will stop it? I guess not.”
Then the Kremlin posted a read-out from Ushakov. The time stamp is 23:55 Moscow time on Friday. Sixty-five minutes had elapsed since the initial Kremlin statement.
Ushakov revealed that he had begun negotiating the presidential call with Witkoff on Wednesday (October 7), but that it had been postponed until Putin returned to Moscow from Turkmenbashi, the Turkmen capital. According [14] to Ushakov, Trump gave Putin his belated birthday greetings, while Putin responded with “words of gratitude of our President to the First Lady of the United States for her active humanitarian activities and, in particular, for her contribution to the efforts to reunite children with families separated during the Ukrainian conflict.”
This is a recorded telephone message: Putin and Ushakov have claimed he has said this in telephone conversations with Trump several times over in the past.
On Russian diesel exports to the US, Ushakov said [14]: “I will not be able to satisfy, dear colleagues, your curiosity and reveal in detail the specific issues discussed by the Presidents… The leaders of the two countries discussed the preparations in detail of large-scale economic initiatives, including possible deliveries of Russian oil products to American and global markets. On this account, by the way, special statements were made already by the Presidents of Russia and the United States.”
Has Trump promised Putin to put a stop to Ukrainian attacks on Russian targets?
Ushakov said: “Donald Trump listened carefully to our argument and said that he would instruct the transmission of the corresponding signals to the Ukrainian delegation that is in Miami these days for contacts with American representatives.”
There is an unusual blackout on the video record of Ushakov’s briefing; no one is visible. Three questions have been recorded from reporters. Asked by a reporter “can you confirm that President Trump has stated the amount of diesel to be provided to the United States?” Ushakov replied: “You know, I read this statement and I read about it ahead of when I told you about the course of this conversation. And what else I can say? A special statement on this subject was made by the Russian President. It has already been circulated across all the media. And besides, the representatives of our Ministry of Energy also made a statement.”
Ushakov was referring [15] to a statement just issued by Alexander Novak, the deputy prime minister in charge of the energy sector: “We are immediately beginning to lift the restrictions on diesel exports ahead of the scheduled deadlines.”
“Can you say whether there were any concessions from the US to Russia and in exchange for what Russia agreed to deliver diesel fuel in the United States?”
“Yu.Ushakov: You know, the American side, I think will give some clarification on this account additionally. I have told you what I wanted to say. Before me, our President has clearly expressed what is needed in his special statement [14].”
According to Moscow sources in a position to know, Putin is keeping secret what diesel terms have been agreed because they are conditional. The Russians are waiting for Trump to order the Ukrainians to cease attacking the hinterland refineries, port terminals, and tankers at sea. The delivery schedule Trump has announced isn’t confirmed by the Russians because the shipments will not occur until and unless Trump proves that he can control the drone war.
“There is a Kremlin wager,” one source commented, “and it’s a safe bet for a good Russian profit. If the Trump announcement helps him improve his position in Congress on November 3, he will owe Putin a big favour, and he should press harder on Zelensky, NATO, the Europeans. And if he doesn’t, or can’t because he loses as badly as predicted on November 3, the Russian diesel export releases proposed for November and December can be stopped immediately. And if there is sanctions relief, they will turn out to be a cheap price to pay, and Russian money to earn, if the entire scheme stops on January 9, and we go back to war as usual.”
On Trump’s side, the wager has been made to appear in Kiev, and also Israel, as a Trump ultimatum.
An Israeli reporter in Washington was briefed by a US and a Ukrainian official to print: “During eight hours of talks in Miami on Friday, Witkoff and Kushner told a Ukrainian negotiating team that the president was expected to speak to Putin and lift sanctions on Russian diesel exports. They were told that Trump decided to move forward after Ukraine ignored multiple requests to stop strikes on Russian oil refineries, which were directly affecting U.S. consumers.”
“A Ukrainian official claimed that during the talks, Witkoff and Kushner threatened that Trump could cut off Ukraine from U.S. intelligence if it continued to ignore his requests. The U.S. official denied such a threat was made and said Witkoff and Kushner told the Ukrainians that the U.S. was a strong partner, providing munitions and intelligence. Ukraine therefore shouldn’t take actions that hurt American consumers, Witkoff and Kushner said. ‘The attacks on the refineries cause pain in Russia, but it causes pain for the U.S., too,’ the U.S. official said…The U.S. official said Witkoff and Kushner are considering visiting Moscow and Kyiv next week to discuss peace proposals, but it’s unclear how Friday’s blowup will affect their plans. ‘Putin is hitting [Ukraine] hard but we think he is open to a discussion on ending the war. We want to work on a new proposal that will be good enough for him in order to get him to stop,’ the U.S. official said [16].”
The Kremlin isn’t saying whether it agrees to reinforce and extend Trump’s October surprise by allowing Witkoff and Kushner to meet Putin next week. Putin’s Kremlin statement said [4] only that he has “confirmed agreement on the continuation of personal contacts between the presidents of the two countries, as well as cooperation through presidential administrations, special services and other agencies.”
Ushakov said [14]: “Nobody wanted to put the phone down the first. And with that in mind, I hope the US president doesn’t mind me if I would like to quote his words that he is ready to continue communicating with Vladimir Putin and tonight, and at night, and the next day… we all know that there is an important international event in China, this APEC summit [November 18-19]. And in this event, at least for now, it is possible to say, that all leaders – both Russian and American – are interested in accepting participation. Accordingly, if both leaders are on the same international platform, I proceed from the fact that they will find an opportunity for to cross, shake hands and talk.”
MARKET REACTION TO THE TRUMP-PUTIN DIESEL DEAL
Crude oil futures rising
[17]Source: https://oilprice.com/oil-price-charts/ [18]
Diesel declining 5% in the fortnight before the Trump-Putin deal
[19]Source: US Energy Information Administration -- https://www.eia.gov/petroleum/gasdiesel/ [20]
[21]Source: https://ycharts.com/indicators/new_york_harbor_ultra_low_sulfur_no_2_diesel_spot_price [22]
Diesel futures, Friday price trajectory showing reaction to Trump-Putin deal – down 3% on the day
[23]Click for larger view: https://www.tradingview.com/symbols/NYMEX-HO1!/ [24]
CNN has reported US market reaction to the Trump-Putin deal as sceptical: “‘We are talking PERHAPS a 5-6% increase in supply between now and year end,’ Dan Pickering, founder and chief investment officer at Pickering Energy Partners, said about the president’s announcement in an email. ‘Bottom line — this is helpful but not a needle mover for global diesel markets,’ Pickering said [25]. ‘Sidenote — there is a reason Trump talked about volumes in tons instead of barrels. The tons number looks bigger to a general observer. This is more politics than a game changer.’ ”
Pickering had earlier editorialised with the US refiners against [26] Trump’s proposed ban on US diesel exports.