Trump's diesel dilemma — by the numbers
The recent removal of restrictions on Russian diesel by President Trump comes amid soaring diesel prices, which more than doubled since early 2026 due to supply disruptions linked to the Ukraine and Iran conflicts. This move is a strategic attempt to alleviate the ongoing global shortages. It highlights the delicate balance of geopolitical tensions and energy supplies that are directly impacting market dynamics, including currency values against the dollar as energy prices surge.
Where it sits in our coverage
Our consensus EUR/USD target sits at 1.075 (median across 8 firms), with Goldman at the upper bound (1.12) and BofA at the lower (1.04). CNBC's report suggests a more favorable outlook for currencies tied to energy exports, resonating with views from JPMorgan, who align with this bullish sentiment.
How firms align
JPMorgan's target of 1.10 is in line with the bullish pressure expected from rising energy prices, as detailed in our internal reports. Meanwhile, BofA, with a more cautious target of 1.04, remains skeptical about the overall currency implications of the energy situation, highlighting differing positions among firms.
What the data shows
Recent forecasts indicate that FX markets may experience volatility as energy prices continue to fluctuate. For more detailed insights, refer to our related research on global energy trends at /research/global-energy-outlook.
How firms align with this view
Aligned with the headline view
Contrary positioning
Key takeaways
- 01Diesel prices have doubled since early 2026, adding pressure to global markets.
- 02Trump's policy shift may strengthen currencies linked to energy exports.
- 03Watch for fluctuations in energy prices impacting the FX market, targeting levels around 1.075.
- 04Ongoing geopolitical tensions could create further volatility in currency pricing.
Market implications
Traders should monitor levels around 1.075 for potential resistance or support as energy impacts currency values. Upcoming OPEC decisions could also influence market positioning significantly.
Risks to this view
A reversal of Trump's policy or a resolution to the conflicts in Ukraine or Iran could lead to a rapid decline in diesel prices, invalidating the current bullish sentiment on linked currencies.
Sentiment by currency
USD+EUR JPY~GBP~Composite USD score: +0.65
Sources & References
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