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*[https://youtu.be/-nLM1i_BXTA Gen. Armageddon returns].
*[https://youtu.be/-nLM1i_BXTA Gen. Armageddon returns].
*[[Larry Johnson]]: [https://larrycjohnson.substack.com/p/a-thimble-for-a-flood-trumps-russian A Thimble for a Flood: Trump’s Russian Diesel Deal… Why the announced volumes barely register against the global distillate shortage].
*[[Larry Johnson]]: [https://larrycjohnson.substack.com/p/a-thimble-for-a-flood-trumps-russian A Thimble for a Flood: Trump’s Russian Diesel Deal… Why the announced volumes barely register against the global distillate shortage].
{{quotebox-float|'''The real winner: Moscow'''
If the deal does little for the [[diesel]] shortage, it does a great deal for [[Russia]]. The volumes that are trivial against a 3 million barrel-a-day gap are not trivial as [[cash]], because diesel is now one of the most valuable commodities on earth. US diesel futures settled at about $4.80 a gallon in September, roughly $200 a barrel....Actual realized prices will depend on discounts, freight and delivery terms, and the revenue is earned first by Russian companies, reaching the state through taxes.
That money arrives when [[Moscow]] needs it. Russia’s budget was built on $59 [[Urals crude]]; in early 2026 Urals was selling in the mid-$40s to mid-$50s at deep discounts imposed by [[economic sanctions|sanctions]], and [[Bloomberg News|Bloomberg]] reported that, at those prices, the shortfall in oil and gas revenue would push the [[deficit]] to almost 2.2 trillion rubles, about $29 billion. On my numbers, the full diesel package alone would cover roughly a fifth to a quarter of that gap.
The sanctions relief is worth more than the announced tonnage. [[US Treasury|Treasury’s]] general license is not limited to [[fuel]] bound for the [[United States]]. It allows Russian diesel to be sold on the global market, and any cargo loaded while the license is in force is exempt from US sanctions until April 2027. That means:
Every exportable barrel benefits, not just the announced tranches. Once Russia lifts its own export ban, all of its diesel can be sold openly for six months, not just the volumes in [[Trump]]’s post. If Russia exported even 0.5 million barrels a day over that period, a figure I use only for illustration, it would earn roughly $14 billion to $18 billion at the same prices.
Smaller discounts. Sanctioned Russian crude sold at a discount of about $26.50 a barrel to Brent in February. Diesel sold legally to mainstream buyers, with conventional shipping and insurance, does not need to be discounted the same way. Each dollar of discount removed is a dollar more for [[Moscow]].
A crack in the sanctions wall. This is the first diesel license longer than the standard 30 days since the [[war]] began, and '''it comes weeks after Trump signed a law calling for [[tariff]]s of up to 100% on the biggest buyers of Russian oil and gas.''' Moscow and its customers will draw the obvious conclusion: [[US]] [[economic sanctions|sanctions]] are [[negotiable]], and enforcement of the new [[law]] is now in doubt. [bold added]
'''[ Johnson's ] assessment'''
This deal is [[politics]], not [[supply]]. It gives the [[White House]] a talking point before the [[2026 Midterms|midterms]] and gives [[Moscow]] billions of [[dollar]]s in hard [[currency]] plus a six-month [[economic sanctions|sanctions]] reprieve it has sought since the [[war]] began, but it does not move the needle on the global [[diesel]] shortage. At best it offsets two weeks of a deficit that, on Miller’s assessment, will persist for years while the [[Persian Gulf|Gulf]] rebuilds. Lower pump prices, if they come, will come from demand destruction, stock draws or a reopened [[Strait of Hormuz]], not from 35 million barrels of [[Russian]] [[diesel]] trickling in over the winter.
The larger cost is [[strategic]]. Easing sanctions for a volume this small hands Russia a [[financial]] lifeline for its war budget and trades away leverage over [[Moscow]], and strains relations with [[Kyiv]] and [[Brussels]], for a benefit that disappears in the noise of a 3 million barrel-a-day hole.}}
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