1/ Russia has the United States over a (diesel) barrel, says Russian analyst Igor Dimitriev. He says that the Kremlin is telling the West that "if you don't hand Ukraine over to us, a global [fuel] crisis will erupt that you won't be able to dig yourselves out of". ⬇️
2/ Noting a sudden increase of activity between US and Russian diplomats and negotiators, Dimitriev says it's due to three converging factors that are threatening Republican Party prospects in the November 2026 Congressional elections: 3/ "The first is the war in the Middle East. The Strait of Hormuz and the Bab el-Mandeb Strait are closed, and the Saudi pipeline to the Red Sea—used to ship the bulk of Saudi Arabia’s diesel exports—has been shut down. 4/ "The second factor involves Russia: following drone strikes on its refineries, the country banned diesel exports—a significant move, given that Russia is the world’s second-largest exporter after the US. 5/ "The third factor is the United States itself. US refineries have been operating at maximum capacity since late August, shipping product overseas, yet domestic diesel stocks are dwindling, and prices have topped $6 per gallon for the first time. 6/ "One consequence leads to another: buyers of Russian diesel are seeking alternatives in Asia, but Asian refineries are cutting back on processing because they are not receiving Middle Eastern oil. 7/ "There isn't enough American diesel to go around. Prices in Europe have doubled. For now, everyone is relying on storage reserves, but those stocks are depleting and will hit rock bottom by spring. 8/ "Now, there is also the threat of "hellish sanctions." On 10 September, Trump signed the Graham Act into law, granting him the authority to impose 100% tariffs on the five largest buyers of Russian energy resources. And who are these five buyers? 9/ "China, India, Turkey, Brazil, and—incidentally—the European Union. Of these, India, Turkey, and China are currently processing Russian oil into diesel for both domestic use and the global market, with Indian refineries posting record margins. 10/ "Enforcing the law would mean knocking Russian crude oil out of the market as well, triggering another price spike just in time for the November elections. 11/ "While pressure on Russia appears to have increased on paper, in reality, Washington has acquired a weapon it cannot currently use—a fact understood in Moscow. 12/ "What did the diesel market look like before the war? Global consumption stands at around 1.4 billion tons annually, though the vast majority is produced and consumed within a single country. 13/ "The international market, however, trades just over 200 million tons, supplied by a handful of nations: the US led with approximately 47 million tons, followed closely by Russia (42 million), Saudi Arabia and India (29 million each), South Korea (27 million),… 14/ …China (20 million), and the UAE (10 million)—based on 2020 data. Key buyers included Europe, Australia, Brazil, Mexico, Turkey, Egypt, and smaller nations lacking domestic refining capacity. 15/ "Russia supplied Europe and Turkey; the US supplied Latin America; and Asia supplied itself and Australia. 16/ "The market was so tightly structured that, in the spring of 2022, Russian industry analysts predicted Russia would have nowhere to offload its diesel once it exited the European market. 17/ "Yet, four years later, three of the seven major suppliers mentioned—Russia, Saudi Arabia, and the UAE—have dropped out. This represents roughly 80 million tons; while that is only 6% of global consumption, it accounts for 40% of international trade. 18/ "Furthermore, refineries in India, South Korea, and China are cutting back on processing, resulting in a further loss of about 20 million tons of diesel annually. All told, out of more than 200 million tons, 100 million are in jeopardy. 19/ "And someone is bound to miss out on that diesel. Who? Major consumers with their own refining capabilities will cut back on purchases and adapt somehow, but they will survive. 20/ "Small, impoverished nations that rely entirely on imports, however, will be left without diesel—and effectively without an economy. 21/ "This deals a massive blow to the Global South, following on the heels of the fertiliser shortages and grain supply disruptions we have discussed previously. 22/ "Why is diesel so critical to them? Because gasoline is for private vehicles; shortages hit countries with large private car fleets hard, impacting the middle class and political approval ratings (consider Trump facing elections in November, or the Federal Reserve… 23/ …recently raising interest rates for the first time in years due to inflation). Diesel, on the other hand, powers trucks, tractors, excavators, and fishing boats—driving sectors like construction, resource extraction, fishing, and agriculture. 24/ "In Africa and South Asia, diesel is also essential for electricity generation. Economies cannot simply switch to alternative energy sources overnight; poor nations lack both the funds and the time. Africa, for instance, has virtually no oil refining capacity. 25/ "Crude oil was extracted and exported, while refined products were purchased from the Persian Gulf and Russia. These were shipped to ports by tanker and then distributed across vast territories by road tankers. 26/ "Now that supplies have halted, African nations have scrambled to source diesel from Asia, but even there, queues are forming and prices are surging. In Bangladesh, which relies on imports for almost all its energy, a two-litre limit was imposed on motorcycle refueling. 27/ "A 25-year-old man was killed during a brawl at a gas station, and a mob subsequently burned three buses. Dhaka has asked Washington for a sanctions exemption for 600,000 tons of Russian diesel needed for the planting season. 28/ "In Kenya, importers are legally required to maintain a 21-day reserve; a single delayed shipment puts the country into emergency mode. 29/ "In the Philippines, hundreds of gas stations shut down back in the spring, while in Pakistan—seemingly close to oil-producing regions, the price of diesel skyrocketed. 30/ "From there, a chain reaction ensues: field pumps stop, flour milling halts, bread delivery trucks grind to a halt, inflation spirals out of control, and governments—already barely hanging on—topple. 31/ "It turned out that major exporters—Russia, Iran, and the Gulf monarchies—possess a lever of pressure over developed nations that, just a year ago, seemed non-existent: the ability to crash the markets for fuel, fertiliser, and food, thereby triggering a global crisis. 32/ "Oddly enough, Ukrainian strikes on oil refineries have only strengthened this leverage for Moscow. The less Russian diesel there is on the market, the higher the price per litre and the more essential Russian oil becomes in any negotiation. 33/ "This doesn't negate the domestic fuel queues or the burnt-out refineries, of course. But the Kremlin seems to have decided to take a hard line: 'If you don't hand Ukraine over to us, a global crisis will erupt that you won't be able to dig yourselves out of.'" 34/ "The "energy truce" announced by President Donald on Twitter was merely a typical Trumpian trial balloon. If no agreement is reached now, come spring, people in places like the Sahel will be fighting over a barrel of diesel just like in Mad Max. 35/ "A makeshift "moonshine still" for producing bootleg fuel will become the centre of civilisation. (By the way, that’s a startup idea worth noting.) 36/ "P.S. Of course, Russia shouldn't overplay this hand. The market is gradually shifting toward alternative sources. Consumption is dropping. Elections will come and go, but Gresham’s Law remains. If the Strait of Hormuz opens up, prices will collapse back down. 37/ "In short, you can't hold onto this leverage too long, or you’ll end up back with just two buyers—India and China—dictating the discount." /end Source: t.me