Oil Prices Steady As Trump Threatens India Over Russian Crude Imports
Oil prices 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.
Trump’s Warning to India
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 Market Trends
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.
Expert Analysis
‘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.’
India’s Role in the Oil Market
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.
Possible Disruptions to Indian Purchases
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.
Current 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.
Implications for Indian Investors
Indian investors should keep a close eye on the developments in the oil market, as any changes in oil prices can have a significant impact on the Indian economy. With the US threatening to impose tariffs on Indian exports, it is essential for investors to diversify their portfolios and consider the potential risks and opportunities in the energy sector.
Conclusion
In conclusion, the oil market is facing significant uncertainty due to the risks to Russian supplies and the potential for secondary tariffs on buyers of Russian oil. Indian investors should stay informed about the latest developments and consider the implications for their investments. As the oil market continues to evolve, it is crucial to stay ahead of the curve and make informed investment decisions.
