Trump is Trading Away Ukraine’s Leverage over Putin
His diesel bargain offers limited relief for American consumers while undermining sanctions and blurring the line between US diplomacy and private business interests. A commentary by William Browder
On Friday, Donald Trump announced that Vladimir Putin would come to the rescue of the American driver.
After a phone call with the Russian president, he declared that Russia would “immediately” supply more than 300,000 tons of diesel to “the American and Global Marketplace”, another 500,000 tons in November and a million tons after that.
A further three million tons would follow, he said, depending on “the condition of their Diesel Refineries”. Within hours the US Treasury issued a licence allowing Russian diesel onto world markets until April.
The timing is no accident. American diesel is averaging $6.28 a gallon, close to its all-time record. The midterms are less than a month away.
On the surface this looks like a deal to help ordinary Americans. In reality it is one of the dirtiest deals I have ever seen.
Start with the obvious problem. Russia almost certainly cannot deliver.
Ukraine has spent months hitting Russian refineries. Its defence ministry says 51 per cent of Russia’s refining capacity is now out of action.
Putin himself admitted last week that the strikes have cost Russia about one per cent of GDP. In June, Russian refinery throughput fell to 3.8 million barrels a day. That is the lowest in more than 20 years.
Russia used to be one of the world’s biggest diesel exporters. Not any more. On 31 July the Kremlin banned exports of diesel and petrol to keep its own pumps supplied. It has extended that ban three times.
In the week to 24 September, Russian diesel shipments from its Black Sea ports fell to zero.In August, Russia actually imported 368,000 tonnes of oil products by sea. That was the most since the full-scale invasion began.
Moscow now says it will lift the export ban. But the ban was never the problem. The refineries are. A country importing fuel for its own trucks is not about to rescue America.
Perhaps Putin will send a token cargo or two so Trump can claim a win. But a promise to supply “the global marketplace” is designed so that nobody can ever check whether it was kept.
Second, even if every ton arrives, it barely matters. The firm promises add up to 1.8 million tonnes. America uses around 190 million tonnes of diesel a year. That is less than one per cent of annual demand, or about three and a half days of consumption.
Add the vague extra three million tonnes and it still comes to just over a week. Diesel futures fell 4.6 per cent on the news. Once traders see how small and unlikely these deliveries are, that drop will disappear.
What troubles me most is the policy.
On 18 September, exactly three weeks before this announcement, Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act into law. It passed the Senate by 86 votes to 11 and the House by 262 to 159.
It allows tariffs of up to 100 per cent on the biggest buyers of Russian oil and gas. The logic was simple. Every buyer of Russian energy is paying for Putin’s war. Cut off the buyers and you cut off the money. Squeeze hard enough and Putin may have to stop.
I always doubted Trump would really punish India or China for buying Russian oil. I never imagined America would announce that it was buying Russian fuel itself. Every ton of diesel Russia sells puts money straight back into the Kremlin’s war chest.
But there is something more sinister going on.
For the first time in this war, Ukraine has real leverage. When Russia bombs Ukrainian cities, Ukraine hits Russian refineries. On Thursday a Russian glide bomb struck two buses in Kramatorsk and killed at least 30 civilians. Putin has refused Zelensky’s offer of an energy ceasefire.
But if Ukraine kept going and knocked out the rest of Russia’s refining capacity, it is hard to believe Putin would not eventually agree to some kind of truce in the air.
Trump has just made that leverage far harder to use. For weeks he has been telling Zelensky to stop hitting Russian diesel because it is “hurting the world”. Now he has written it into the deal. Three million of the promised tonnes depend on the condition of Russia’s refineries. From now on, every Ukrainian drone that hits one will be presented in Washington as an attack on American drivers. Putin could not have designed it better himself.
So what does Trump get in return? Follow the business deals.
The first is Lukoil. The Russian oil giant was sanctioned last October and has been forced to sell its international assets, worth around $20 billion to $22 billion.
On Friday the American buyer, Carlyle, walked away after months of waiting for approval.
The front runner is now a consortium led by Todd Boehly, the former Chelsea owner, who has given $2 million to Trump’s political projects.
His partners include Sheikh Tahnoon bin Zayed of the UAE, who has invested in projects involving Jared Kushner, Steve Witkoff and Trump’s sons, and the Qatari Al-Khayyat family, who are building a resort in Albania with Kushner and Ivanka Trump.
A US government agency, the Development Finance Corporation, is expected to take a stake. And Kushner has discussed the sale directly with Putin’s investment envoy, Kirill Dmitriev.
The second is Nord Stream. Reuters reported on Thursday that Kushner and Dmitriev have also discussed bringing an American investor into the sanctioned pipelines that once carried Russian gas to Germany. The White House says there have been no recent talks.
This is what peace talks look like under this administration. The men negotiating Ukraine’s future are the same men whose families and business partners stand to profit from Russian assets. And this is only what we know so far.
I have spent nearly 17 years, since my lawyer Sergei Magnitsky was killed in a Russian prison, watching Putin use money to buy influence in the West. He has never had it this easy.
Congress gave Trump a tool to end this war. Eighty-six senators voted for it. They should now insist that he uses it, and not trade it away for a few days of cheaper diesel and a slice of Lukoil. Britain and Europe should say clearly that they will not follow.
Ukraine paid for its leverage in blood. It should not be sold off for a midterm headline.
A previous version of this article was published by the British daily The Telegraph
IEP Bocconi does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
