Energy prices rise after Trump’s ‘energy ceasefire’ fails

Key Points:

• Oil and gas prices surged Monday after President Trump’s announced “energy ceasefire” between Russia and Ukraine failed to materialize, with Brent crude rising nearly 2% to $108 per barrel and U.S. crude up over 2% to about $94.
• Trump declared an immediate ceasefire on energy targets in the conflict, but both Russia and Ukraine quickly denied agreeing to the deal, and Russian strikes on Ukrainian energy infrastructure continued unabated.
• The ceasefire announcement followed Trump’s Friday phone call with Putin, in which Russia agreed to supply millions of barrels of diesel fuel to the U.S. and global markets, prompting the U.S. Treasury to suspend sanctions on Russian fuel exports for six months.
• Experts remain skeptical about Russia’s ability to significantly increase diesel exports soon due to extensive damage to its refineries from Ukrainian attacks and existing production declines, with diesel production down nearly 30% compared to 2022 levels.
• The ongoing high fuel prices, especially diesel which has risen nearly 80% since the start of the year, are a major political issue ahead of the November midterm elections, with voters citing gas prices as a key concern.