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Before the weekend was out, US President Donald Trump announced an "energy ceasefire" between Ukraine and Russia would begin immediately, without elaborating on the details. Ukrainian President Volodymyr Zelenskyy however later said the ceasefire was "news to me" but he supported it if Russia stopped striking energy targets. Meanwhile, Mr Trump said a new deal with Russia to open up millions of barrels of diesel for export will lower diesel prices, but experts say it won't "move the dial" on costs for consumers.
The Commonwealth Bank's senior geo-economic analyst Madison Cartwright said the impacts of the Russian diesel export ban (now altered) has been part of the oil price story, saying "this will increase supply of diesel in the market, and that will bring down prices somewhat." But he added that "another big part of the story is that a lot of the refined products, including things like diesel and petrol, haven't been able to get out of the Strait of Hormuz in the way that we've seen crude oil being able to get out." The underlying shift amid all the noise appears to be one of Trump moving back from his position of recent months to align more with Russia than Ukraine in their long running war. A broader question remains around the price of oil. Mr Cartwright said "the Gulf and Russia combined account for about 45 per cent of pre-war level supply of diesel products. And so really both parts are the major part of the story here. And the war in Iran will continue to keep prices up, even though we're going to see this increased supply come back from Russia."
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