Trump’s Russian Diesel Deal Draws Criticism of Ukraine

Nancy Yousef is a staff writer at The Atlantic covering national security in the defense department, and she joins us now. Nancy, later in the show, we're gonna get into kind of economic ramifications so much as they're gonna be some from the release of this diesel. But let's start with him doing this. I mean, we we were gonna talk about the plague, the Russian plague a little later in the show, and the president said he was gonna talk to Vladimir Putin about that. No indication of the readout if in fact that happened. How surprised should we be by what really is an overture here by the Russian president to to president Trump? Well, I think president Trump is signaling that he is trying to address an immediate economic problem, but doing so at a potential geopolitical cost. You'll remember that The United States put these sanctions into place because they were trying to cut off revenues that the Russian government was using to pay for the war in Ukraine. Now because of the war of... In Iran, The United States is willing to lift some of those, limits on Russian revenue to try to offset, the cost of the war in Iran. The question becomes, is it even going to work? One, will Russia be able to produce the kinds of, promises that it's made in this deal? And if so... And even if that happens, it's not clear that that by itself will offset the costs of rising diesel brought on by the war in Iran. So I think you're seeing a United States that is willing to potentially, make a geopolitical, gamble in a bid for short term economic gains. This also came as judge Kriti and Steve Witkow were in Miami negotiating, with Ukrainian representatives. The timing of this seems surprising. Do we have any reporting as to whether or not they themselves or other members of the administration were caught off guard? We haven't heard the details in terms of how administration officials have responded. Even the sort of details of the deal are a little bit unclear. We've heard promises of what Russia will deliver in October, November, and then increasingly so over... Or as time goes on. But we have heard from the Ukrainians who are deeply frustrated by this deal because they see it as a means of potentially funding Russia's ability to keep, building the kinds of missile systems and other offensive weapons needed to attack Ukraine precisely at a time when Russia is so aggressively going after Ukrainian infrastructure ahead of the cold winter months. And so I do think you're going to see growing response, both in The United States and Ukraine because, as you know, The United States is trying to enter a deal to help in this war precisely when, it is also agreeing to something that could allow Russia to prolong it. Nancy, contemporaneous with this, we saw the treasury department lift sanctions, on Russian oil, Russian petroleum, and I guess there's some... It's something dubious about that. Unclear if that's going to be legal as we we look ahead here. But let me ask you about Europe's response, and we haven't heard a whole lot from European leaders in light of this announcement, which was made as the president was was leaving the White House yesterday afternoon, so so late in Europe. But what does it say about Europe's leverage, Europe's position here in trying to find an end to this conflict? Well, you remember that The United States has really pushed Europe to provide more weapons to the Ukrainians as United States has been unable or unwilling to do so. And so this puts increased pressure on Europe to produce weapons for the Ukrainians because of the risk that the Russians will now have the capability to bring more weapons to the battlefield. And so I think if you're the Europeans already trying to step up and provide more in the absence of US weapons, this puts even more pressure on them to provide those weapons even faster. Nancy, I do want to tie this into what's happening in Iran because, obviously, that's the main driver of the elevated gas and and oil prices around the world. You had some reporting out earlier this week that the Trump administration was in fact looking at potential strike options before the midterms. Then the White House came out and said, we're not gonna strike before the midterms. Now it seems like that might be back on the table. Do we have any idea what options they were wearing... Weighing specifically and and why they would do that? Because in your piece, you walk through the fact that every time hostilities ramp up, oil and gas prices ramp up as well. So wouldn't that be counterintuitive, especially for a president who seems to be going to some pretty extreme lanes to try to lower these prices before the midterms? It's such a great question. So the Pentagon is drafting those options right now, and so we don't have a decision yet on what that could look like or even the scope of them. But you're right. The strikes in and of themselves, whether they happen before the midterms or after, are unlikely to change the price of gas and oil in a way that benefits the president in terms of the economics of it. However, I think there's a feeling among some within his administration that doing something ahead of the elections and being able to say that it is going after the Iranians and weakening the Iranians could potentially give them some kind of lining and more importantly give, Republicans across the country who are hearing from constituents that are frustrated about the war in Iran that The US is being, on the offense, that it is doing something, and that the strikes are the first pathway towards ending the war. I think the devil is in the details. And for Americans, I don't think you're hearing, a sentiment of wanting more war, but rather a conclusion to it that promises an enduring drop in gas prices. So I think that's why you're also seeing some of the oscillation back and forth about whether this is the best way to go about trying to change public sentiment around this war ahead of these critical midterm elections. Nancy, let me ask you what's happening, if anything, in this vacuum that's emerged here while we have this period of, I think, you characterize as relative tranquility, in this conflict. And you write, the latest military deliberations come as the administration pursues two tracks at once, ongoing military and economic pressure and indirect negotiations. Washington and Tehran continue to communicate through mediators, but significant differences remain over the terms and sequencing of a ceasefire and end to The US blockade of the Strait Of Hormuz and The Straits reopening. We watched here in New York on the sidelines of the UNGA as there were these conversations taking place, the kind of awkward acknowledgement that secretary of state Marco Rubio and others made of those talks, not just happening, but happening for for many hours here. What is their status and indeed, sort of how much constructive is happening in these indirect negotiations right now? So while the talks are going on, the fact that both sides are preparing for the resumption of strikes at some point, whether it's before the midterms or after, I think makes having constructive enduring talks much more difficult because both sides are anticipating something else other than a peaceful resolution to the conflict. And so what you're seeing is both sides using the talks as a form of leverage rather than, I think, looking towards an end state. Well, both sides want the water in. Iran has suffered economically because of the closing of the strait as well and the naval blockade that's in place. And, of course, The United States has seen a real economic impact because of the war. I don't think either side believes that the other is willing to sort of enter terms that they agree upon. I think the biggest challenge for the president is up until this point, we have seen a United States that wants sort of a declared victory in this conflict. And I don't think that the Iranians are willing or believe that they're at the position where they have to give that. And so the question ultimately going forward is what kind of concessions are both sides willing to make, particularly The United States? Will president Trump accept an agreement in which, the Iranians, for example, retain some leverage over the Strait Of Hormuz and and and in doing so, deprive him of being able to say that he was, categorically victorious of the war. Nancy, quickly before we let you go, I do wanna ask you if they do wait, if the administration does wait for for more strikes until after the election, you kind of write about what the menu option could be. We've done analysis here at Bloomberg about the dwindling number of military targets left. What could the administration do? What is left, and will any of it really change or move the needle when it comes to, the Iranian leadership and and how they're making these decisions? You're absolutely right. I think the options in terms of what The United States would strike is, what the message they're trying to send with them. If, for example, we see strikes much like The United States did in June in which they went after nuclear facilities, You can see an administration say that the strikes have obliterated again Iran's nuclear program. If you see the targeting of things like missile launch sites and others facilities that the Iranians have used to launch attacks at Gulf partners at ships transiting the Strait Of Hormuz, then I think the message will be that The United States is trying or has successfully, depending on your perspective, weakened Iran's ability to have leverage over the Strait Of Hormuz and to be a threat to its Gulf allies and partners and therefore need to enter negotiations quickly because they are not as strong as they once were. In in some ways, the longer this conflict goes on, the harder it is for the Iranians to use the closing of the Strait Of Hormuz as leverage, particularly as, the markets, find alternative routes. Yeah. The challenge is one way that the markets have, responded is by releasing strategic reserves, and that in and of itself, on the flip side, puts pressure on on The United States to reach an agreement because, of course, those reserves are not unlimited.