Oil Prices Steady As Trump Threatens India For Taking Russian Crude

Oil steadied, after a three-day drop, as investors weighed the impact of risks to Russian supplies, with US President Donald Trump stepping up his threat to penalize India for buying Moscow’s crude.

Brent traded below $69 a barrel after shedding more than 6% over the previous three sessions, while West Texas Intermediate was near $66. Trump said he would be “substantially raising” the tariff on Indian exports to the US over the nation’s purchases of Russian oil as part of a bid to force Moscow to agree a truce in Ukraine. New Delhi slammed the move as unjustified. 

Oil has trended lower in recent sessions following a three-month increase. The weakness has been driven by signs that the world’s largest economy was slowing amid Trump’s broader trade measures, endangering energy demand, as well as moves by OPEC+ to relax supply curbs. Taken together, that’s spurred concerns that a crude glut will form this half, weighing on prices. 

“The fundamental outlook for the oil market is bearish: OPEC+ supply increases should ensure the market is in surplus from the fourth quarter,” said Warren Patterson, head of commodities strategy at ING Groep NV. “However, a key and very real risk to this view is the potential of secondary tariffs on buyers of Russian oil.”

The US president’s latest warning to India came ahead of his Aug. 8 deadline for Russia to reach a truce with Ukraine. US Special Envoy Steve Witkoff is expected to visit Moscow on Wednesday, Tass reported.

India emerged as the biggest buyer of Russian seaborne exports of crude following Russia’s invasion of Ukraine in 2022, soaking up discounted barrels shunned by western nations and ramping up purchases from almost zero to about one-third of imports. China is also a major taker of Moscow’s oil.

“There is a lot of noise around India facing tariffs, but clearly there is the risk that other buyers also face secondary tariffs,” said ING’s Patterson. “The more buyers who face these tariffs, the more difficult it becomes for the market to deal with the potential disruption.”

Any disruption to Indian purchases of Russian oil could force it to look elsewhere for supplies. Rystad Energy said in a recent note that other OPEC+ countries, especially in the Middle East, were in a position to offset any potential shortfall. At the weekend, the alliance agreed to raise production from September by about 547,000 barrels a day. 

Prices:

• Brent for October settlement was little changed at $68.80 a barrel at 9:04 a.m. in Singapore.

• WTI for September delivery was steady at $66.29 a barrel