Oil Steadies With Supply In Focus As US To Hike Tariff On India

Oil steadied after a four-day advance as investors waited for clearer signals on supplies, with the US poised to double a tariff on all Indian imports to penalize the country for buying Russian crude.

Brent traded below $69 a barrel after closing at a three-week high, while West Texas Intermediate was near $65. On Monday, the Department of Homeland Security issued a draft notice on the move — due to take effect Wednesday — as part of broader efforts to broker a peace deal between Russia and Ukraine.

Separately, President Donald Trump also indicated that he could impose additional tariffs on Russian trading partners or sanctions targeting Moscow if there was no progress on a deal, saying there could be “very big consequences” if nothing happened in the coming weeks. The Indian government has decried the so-called secondary tariffs as unfair.

Crude has traded in a narrow band for most of August, with traders assessing the impact of US levies, as well as the longer-term market consequences of supply hikes from OPEC+. Oil found support in recent sessions after Federal Reserve Chair Jerome Powell signaled that the central bank could cut interest rates as soon as September, which could buttress energy consumption.

“If we go ahead with the doubling of Indian tariffs, the market will again question Russian flows, and could see a near-term retest up toward $70,” said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp. The crude market was also focused on a recent spate of Ukrainian attacks against Russian energy infrastructure, he said.

Following the series of OPEC+ hikes — which authorized the return of more than 2 million barrels of day of output — as well as supply growth from nations outside the alliance, there are widespread concerns that a crude glut will form in the coming quarters as production outpaces consumption. 

Prices:

• Brent for October settlement fell 0.4% at $68.55 a barrel at 8:27 a.m. in Singapore.

• WTI for October delivery was 0.4% lower at $64.52 a barrel