It was a familiar pattern in this war on Monday night for Volodymyr Zelensky: He agreed, but not exactly. In his evening address, the Ukrainian president announced that he would support a truce on strikes against energy facilities struck by the workers, if Washington could ensure that this time, Moscow will truly abide by it. That one word, ‘if', is performing most of the work in this story, and is why a purported breakthrough made by Donald Trump a few hours ago was already unravelling as markets opened.

It started with a Truth social post. The fact that Ukraine agreed not to hit Russian energy targets and Russia agreed to do the same was Trump's opening point; the recent rise in global diesel prices was "mostly caused by the Russia/Ukraine war, not Iran," he continued. The last line is as important as the ceasefire itself. A day earlier, Trump publicly criticized Zelensky for the rising prices in fuel, including in the U.S. where the average pump price for diesel gas hit record-highs in the weekend above $6.23 per gallon. Trump is going to win a political battle, as long as there is an energy truce that is extended to the domestic gas market.

The announcement was undermined almost immediately by Zelensky's response, which was posted about an hour later. “Ukraine wouldn't accept any agreement on such terms and no agreement must be short-lived, verifiable and must be for the purpose of ending the war, not just giving Moscow time to consolidate its position,” he added. Not a word came out of the Kremlin, however. It was silence that spoke, and traders heard it that way: diesel futures trimmed their initial rise, with late-closing gains of just a percentage point, an oily response for such a large claim. Reaction to the energy file ranged from indifferent to lukewarm, with one analyst based in Washington stating that a confirmation from Kyiv and Moscow would have more meaning than a Washington announcement.

The economic context is why it is that this is the very ceasefire proposal that is on the table. For almost a year, Ukraine has been engaging in an internal struggle with Russian oil refineries, transforming them into a field of conflict.For more than a year, Ukraine has been making Russian oil refineries into a battlefield of their own. Russian refining operations have been hit by drones over seventy times since January, bringing Russian output down to its lowest level in around 20 years. In response, Moscow has kept renewing a domestic diesel export ban, which was last extended in July and is expected to continue until the end of September, and is considering whether to keep it in place until the end of the year.

Exports of gasoline will continue to be prohibited through the end of January, and exports of jet fuel will be frozen through November. Even Russia's Vladimir Putin has finally disavowed any notion that the damage is limited, saying at an Eastern Economic Forum audience this month that the authorities had thought their refineries would not come in their way and that people should be prepared for more disruptions.

Those numbers behind that admission are quite shocking. The city of Moscow has reduced its own oil production forecast to a seventeen-year low and significantly reduced forecasts for exports of fuel for 2026 and 2027. Russia's oil industry crisis is a serious blow to the oil-fuelled Russian government, and the Russian government uses a lot of petroleum money to run the country. That's why Ukraine is not about to just sit on its ass. Kyiv has relied on these refineries as legitimate military targets, as they say it does more to shorten the war than virtually anything else in their arsenal, other than territory itself.

That makes Trump's action here more nuanced than a mere gesture to peace. Whether Trump blames it on Russia and Ukraine or not, Washington has its own diesel issue, as global refined products markets are tightening up. A truce to allow Russian refineries to recover without a corresponding cessation of Russian attacks on Ukrainian power plants and utilities would provide little benefit to ordinary Ukrainians as they face yet another winter of power outages, but it would provide a tremendous benefit to Russian export volumes and, in turn, global fuel supplies. But that imbalance is what Zelensky's conditional language is seeking to protect against.

There's also a credibility problem with the format itself. This isn't Washington's first declaration of a Russia-Ukraine truce only for it to fall apart. A three-day ceasefire earlier this year, which was in effect on the occasion of the Victory Day, was short-lived. Energy-infrastructure pause languished in the spring, due to uncertainty over the timing of verification. As word of Monday's announcement spread, gunplay continued around the port facilities and rail lines around Odessa on both sides, a sign that the guns have not been silenced anywhere near what the headlines suggest.

That's not about a rhetorical message from Washington, but whether Moscow will allow outside verification of its own compliance, which it has refused during this war. In recent weeks, there have been reports of special envoys Steve Witkoff and Jared Kushner travelling between Kyiv and Moscow and more meetings at the security-adviser level are likely to take place soon. Until either of those meetings comes up with an agreement both sides can sign onto, not just one that one side says and the other side qualifies within an hour, this remains a proposal, not a truce, and global fuel markets shrug, judging by them.The general trend shown in the chart above which analysts and Russian authorities themselves have noted is that refining capacity has continued to deteriorate through the year, despite the monthly figures quoted varying from source to source.