Crude Oil Rebounds From Five-Week Low, WTI Hits Intraday High After Trump Doubles Tariff On India To 50%

Trump Tariff Impact: Global crude oil prices edged up about 1% on Wednesday after falling to a five-week low in the prior session as US President Donald Trump imposed higher tariffs on India for buying Russian crude and a larger-than-expected US crude storage draw last week.

Trump issued an executive order on Wednesday, Aug. 6, levying an additional 25% tariff on goods from India, saying it directly or indirectly imports Russian oil. This comes one week after Trump first announced a 25% tariff and threatened to levy 'penalty' on India for its Russian crude purchases.

Brent crude futures last rose 80 cents, or 1.2%, to $68.44 a barrel, while US West Texas Intermediate (WTI) crude rose 80 cents, or 1.2%, to $65.96. WTI hit an intraday high of $66.75 after Trump's tariff update. On Tuesday, both benchmarks fell for a fourth straight session, with Brent hitting its lowest since July 1.

On Wednesday, crude oil markets also found support from a bigger-than-expected decline in US crude inventories last week. The US Energy Information Administration (EIA) said energy firms pulled three million barrels of crude from inventories during the week ended Aug. 1.

India, along with China, is a major buyer of Russian oil. India turned to purchasing Russian oil sold at a discount after Western countries imposed sanctions on Moscow and shunned its supplies over its invasion of Ukraine in 2022. Russia was the world's second-biggest producer of crude oil in 2024 behind the US.

The discounted Russian crude has reduced Indian refiners' costs. India imports more than 85% of its oil needs. Official data reveals Russia has become the top supplier to India, accounting for about 35% of India's overall supplies, up from less than 2% before the war in Ukraine.

Russia currently accounts for approx. 45–50% of India’s total oil imports. "If Indian refiners scale back Russian purchases, an estimated 1.7 million bpd of supply could be at risk, potentially tightening global crude markets-especially if alternative sources are not readily available or economically viable," said Mohammed Imran, Research Analyst, Mirae Asset Sharekhan.