The key facts

  • Russian oil production in October rose by 210 thousand barrels per day — to 8.73 million barrels per day (data from the IEA's November report).
  • On October 9, Trump announced a diesel deal with Putin; the same day the US Treasury issued General License No. 135 for transactions involving Russian diesel until April 7, 2027.
  • Global oil supply in October rose to 105.4 million barrels per day and, for the first time since the start of the Iranian war, exceeded demand.

Output growth and the diesel deal

Crude oil production in Russia increased in October by 210 thousand barrels per day, reaching 8.73 million barrels per day. These figures are cited by the International Energy Agency (IEA) in its November oil market report. The same month was the one in which US President Donald Trump announced a diesel agreement with Moscow: on October 9 he reported an arrangement with Russian President Vladimir Putin, stating that additional supplies of Russian diesel would help reduce fuel prices in the US and on world markets. According to Trump, Russia was to immediately deliver more than 300 thousand tonnes of diesel, then 500 thousand tonnes in November and another 1 million tonnes after that. The same day, the US Treasury's Office of Foreign Assets Control (OFAC) issued General License No. 135, permitting transactions for the sale, delivery, unloading and import of diesel of Russian origin, including to the US, until April 7, 2027.

What links — and what does not link — these two events

An important caveat: the IEA did not link the growth in Russian production directly to the diesel agreement — the coincidence in timing remains, per the report, precisely a coincidence. Moreover, different products are involved: the agreement concerns diesel, while the agency's statistics reflect crude oil production. The report contains no information on how the stated diesel supply volumes are actually being fulfilled. At the same time, the agency notes that diesel supplies remain constrained due to attacks on Russian energy infrastructure and disruptions in the Middle East.

The world market returned to surplus

The broader context of the November report is a reversal in the global market balance. In October, global oil supply rose by 2.3 million barrels per day, to 105.4 million barrels per day, against the backdrop of a recovery in exports from Persian Gulf countries, and for the first time since the start of the Iranian war exceeded demand. The IEA raised its fourth-quarter supply forecast by 3.3 million barrels per day. Observed oil stocks increased in October by 52 million barrels — the first increase since June, though it was provided by oil at sea, while onshore stocks continued to decline. Looking ahead, the agency forecasts growth in global supply of 6.6 million barrels per day — to 108.1 million barrels per day in 2027, which will exceed the projected demand growth of 2 million barrels per day. The IEA expects a surplus in the fourth quarter and larger stock builds next year, but points to risks to the market's recovery due to attacks on shipping.