As a series of actions by U.S. President Donald Trump have raised new doubts about Washington's reliability as Kyiv's most important military partner, Ukraine is facing increasing uncertainty and concerns regarding its ability to sustain the war against Russia.
The agreement reached between Trump and Putin is to relax sanctions against Russia in exchange for Russia supplying diesel to the global market; at the same time, the United States has also restricted the sharing of intelligence with Ukrainian forces. This puts Ukrainian President Zelensky in a difficult position as winter approaches.
Rising diesel prices – which are crucial for freight transportation and agricultural production – often lead to increased costs throughout the economy and exacerbate inflation. As the mid-term elections in the United States in November approach, Trump is under pressure to reduce fuel costs.
However, experts interviewed told CNBC that this diesel agreement will only bring marginal fiscal benefits to Russia, and its impact on global energy prices will not be significant. Its broader political implications may be more important; it could perhaps reinforce the Kremlin's belief that they can still obtain concessions from Washington without making concessions on the Ukraine issue.
"The main gain for Russia is political: Trump's decision has alleviated the pressure of sanctions and weakened Western unity," said Sergei Alekhschenko, a senior researcher and head of economics at NEST Centre, to CNBC.
Diesel Protocol
The agreement reached between Trump and Putin involves Russia supplying 4.8 million tons of diesel to the global market, which is equivalent to about 10 days' demand in the United States or about one day's demand globally. Experts say that this is not sufficient to have a significant impact on prices.
"This doesn't even come close to touching the edge of the problem – the scale is very, very small," said Neil Atkinson, former head of the Oil Industry and Markets department at the International Energy Agency ( IEA ), on Monday in the CNBC program " Squawk Box Europe ".
Aleksashenko estimates that the initial phase of this phased agreement covers 1.8 million tons of diesel, which could generate an additional export revenue of up to $1.25 billion within three months, equivalent to about 1% of Russia's commodity export revenue for the same period.
However, the assistance to the budget of the Russian Federation will be much smaller, less than 30 million US dollars per month, which is less than 0.07% of the monthly federal revenue.
Therefore, it is unlikely that this agreement will substantially strengthen Russia's war financing, said Alekhsenko. On the contrary, its main benefit for Moscow lies on the political level, as it alleviates the pressure of sanctions and weakens Western unity without requiring Putin to make concessions on the Ukraine issue, he told CNBC.
This researcher also believes that the additional Russian diesel entering the global market is not sufficient to significantly reduce consumer fuel prices in the short term.
"Providing funding for the war is currently Putin's top priority, and he is prepared to increase investment in this area, even if that means cutting all other expenditures," added Aleksashenko, referring to Russia's 2027 budget draft.
The bigger problems Ukraine faces
"This [diesel] agreement, rather than encouraging compromise, is more likely to reinforce Moscow's belief that sustained pressure will ultimately lead to more concessions from the West," Maria Sniegova, a senior researcher at the Center for Strategic and International Studies ( CSIS ), told CNBC.
Zelensky told reporters in Brussels on Friday that this diesel agreement could also set a precedent for further relaxation of sanctions, while emphasizing that although Ukraine has been working hard to develop alternative solutions, it still relies on American military technology and intelligence.
"Sanctions will be lifted after natural gas," Zelensky said, "and they will also be lifted in relation to other areas. Then it will be the turn of the banking system, certain individuals, and the chemical industry."
Earlier this week, reports emerged that the military application Starshield of Starlink by SpaceX was restricted in Ukraine. Elon Musk, the CEO of SpaceX, posted on X stating that any restrictions on that network are ultimately the responsibility of the U.S. government and the president.
Reuters cited three informed officials as saying that the order to restrict Ukraine's use of Starshield came from within the White House. CNBC has contacted the White House for comment on this matter.
These consequences are evident in Ukraine. With the reduction of the Starlink internet speed restrictions, Ukraine is no longer able to downplay some Russian drones. This week, Ukraine also did not receive any advance warnings about incoming ballistic missiles from its partners, resulting in civilian deaths, according to Ukrainian officials.
Sergey Yerkachy, the First Deputy Minister of Reintegration, Infrastructure, and Transport of Ukraine ( Serhiy Derkach ), stated that the Starlink restrictions have encouraged Russia to intensify its attacks on Ukraine.
"As the United States imposes restrictions on the use of Starlink on the battlefield, Russia sees this as an opportunity to inflict more suffering and damage on Ukraine's civilian infrastructure," Gerkach told CNBC on Friday.
Russian authorities have not responded to multiple requests for comments from CNBC.
Political crackdown
Sniegova believes that this diesel agreement is a political and moral blow to both Ukraine and the Western alliance. The U.S. sanctions exemption, which lasts until April 2027, may lead to Russian diesel exports exceeding the initially announced volumes, thereby increasing Moscow's economic gains, she warns.
"If the White House uses military and intelligence support as a lever to limit Ukraine's offensive actions, then the impact could be much greater," said Snegova, adding that Ukraine's attacks on Russian refineries have already imposed considerable economic costs on Moscow.
She added that such actions could have even more serious consequences for Ukraine's efforts to weaken Russia's war economy.
She stated that this diesel agreement further undermines Washington's credibility as a mediator in the eyes of Ukraine and its European allies, as it appears to reward Moscow without in return demanding any concessions, while at the same time increasing pressure on Kiev.
Sneegovaya said that the problem is that it is extremely difficult to achieve military autonomy for Europe and Ukraine in the short term, while Europe is making slow progress in developing the necessary capabilities.
"The war has lasted for nearly five years, and Ukraine and its European partners still rely heavily on the United States in key areas such as intelligence and missile defense. It is unlikely that these dependencies will be overcome during the remaining term of the Trump administration," she told CNBC.
