Trump is buying Russian diesel and not Canadian, what a jerk.
That’s what I kept hearing on Saturday. I really wasn’t paying a ton of attention to the news over the past few days. Trying to enjoy Thanksgiving and taking in my nephew’s 10th birthday party were more important to me than whatever was happening with Trump.
We all need a break now and again, and this was mine.
But Trump kept coming up. My brief forays online were filled with similar comments.
So what was really going on?
The trouble with figuring out what is going on when there is a Trump controversy is that so many people go over the top, including Trump himself. DJT makes an over-the-top comment, the media and/or his adversaries exaggerate what he said, and sorting truth from fiction becomes difficult.
That’s the case here.
On Friday, Trump made an announcement that was portrayed in many media outlets as the United States buying Russian diesel. This was paired alongside Trump’s recent decision to allow the import of 30,000 tonnes of potash from Belarus as a rejection of Canada.
What’s the truth?
Well, it’s a lot more nuanced. When you understand the full story, Trump is still being a jerk, especially to Ukraine, but there is no rejection of Canada.
Is the United States buying Russian diesel…
Maybe, but not necessarily.
What Trump actually announced was that he was lifting sanctions on Russian diesel entering global markets. His only real reason for doing this is that the price of diesel is so high it’s impacting the American economy. Heck, it’s impacting the world economy and could hurt him in the midterms.
So Trump made a move to try and lower the price by reducing restrictions on the export of Russian diesel.
“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,” Trump posted to Truth Social.
Here’s the full Truth Social post.
A little perspective goes a long way…
To put all this in perspective, 300,000 tonnes of diesel works out to about 2.2 million barrels this month. Canada currently sells the United States about 186,000 barrels of diesel per day, or 5.6 million barrels per month, which is roughly 68 million barrels per year.
The Canadian numbers are just exports to the United States. The Russian numbers are exports into the global marketplace, meaning the U.S., but more likely the E.U.
While Europe will denounce the deal, perhaps with reason, it shouldn’t actually comment.
The E.U. still imports about $3.7 billion Canadian worth of Russian energy each month. Most of that is liquefied natural gas; some of it is oil, especially for Hungary and Slovakia.
When the E.U. criticizes any country for enriching Putin and funding his war machine, it rings hollow.
From the German Press Agency DPA:
“Russian strikes killed over 80 Ukrainian civilians in two days. Moreover, it has stepped up its hybrid attacks against Europe, both EU Member States and NATO Allies,” EU foreign policy chief Kaja Kallas said in a statement on Saturday.
Suspending sanctions on Russian diesel deliveries would give Moscow “more revenues to wage war,” she warned.
“This is not the time to ease pressure on Russia, and Europe won’t.”
I’m not sure how European leaders can say this with a straight face.
Now, Canada could have and should have done its part to lower European reliance on Russia by exporting more of our LNG. We all know, however, that Justin Trudeau said there was no business case for exporting LNG to Europe, even as Germany, Greece and others were begging for it.
Now, American LNG has replaced much of the Russian product, but Putin’s natural gas still accounts for about 15% of the European supply, even as European leaders denounce this deal.
The Europeans were supposed to phase out their reliance on Russian energy, but it looks like that timeline will be extended even as they denounce this deal.
I’m not a fan of Trump easing these restrictions, but this is about global markets and global prices. It has nothing to do with Canada. As for Europe’s protests, give me a break. They are pure hypocrites on this file.
About that potash...
On September 15, the first shipment of potash from Belarus in four years left the Russian port of Bronka and is expected to arrive in New Orleans on Wednesday, October 14.
Prior to 2021, Belarus accounted for about 8% of American potash imports, Russia accounted for 10%, Canada 75%, and the rest came from various countries. When the United States imposed sanctions on Belarus, Canada took up most of that share.
Russian imports to the United States never stopped, even after the invasion of Ukraine.
While Trump is boasting about the potash deal with Belarus, its level of supply is unlikely to go much beyond what it was before the sanctions, but it could end up putting pressure on Canadian companies to lower their prices.
I’m going to shock you all and recommend that you watch Andrew Chang’s explainer for CBC. It does a good job of breaking it down.
Trump may be helping Putin and irritating allies, but Canadians shouldn’t mistake that for a direct attack on our energy or potash exports.
Great leadership move by Trump, as usual. He should continue to ignore WEF clown Carney since Carney walked away from the trade deal after agreeing to it.
As per trade rep Greer, who is far more believable than the Carney blarney.
The only angle cbc has left is to capitalize on the well promoted narrative that failure of Americans to purchase Canadian agricultural products is a betrayal of some obligation that they have .