NEW YORK: Oil prices edged up about 1% on Wednesday after falling to a five-week low in the prior session after US President Donald Trump imposed higher tariffs on India for buying Russian crude and a larger-than-expected US crude storage draw last week.
Brent crude futures rose 80 cents, or 1.2%, to $68.44 a barrel at 10:37 a.m. EDT (1437 GMT), while US West Texas Intermediate (WTI) crude rose 80 cents, or 1.2%, to $65.96. On Tuesday, both crude benchmarks fell for a fourth session in a row, with Brent closing at its lowest since July 1.
“Prices bounced up on the potential higher tariffs on India but the market is waiting for some sort of a formal implementation as well as which elements in the market are to be affected,” said Rystad analyst Janiv Shah.
Trump issued an executive order on Wednesday imposing an additional 25% tariff on goods from India, saying it directly or indirectly imported Russian oil. India, along with China, is a major buyer of Russian oil.
That announcement came despite comments from a Kremlin aid earlier on Wednesday that US envoy Steve Witkoff held “useful and constructive” talks with Russian President Vladimir Putin, two days before the expiry of a deadline set by Trump for Russia to agree to peace in Ukraine or face new sanctions. Russia was the world’s second-biggest producer of crude oil in 2024 behind the US, according to US federal energy data. “Expectations appear that India may reduce its buying of Russian crude, but I can’t see them doing so entirely as they have been making supernormal profits on buying cheap Russian crude,” said Ashley Kelty, an analyst at Panmure Liberum.
Rystad’s Shah said a planned supply increase from the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries and allies like Russia, would offset a potential decline in Russian oil supply.
Indian Prime Minister Narendra Modi , meanwhile, will visit China for the first time in over seven years, a government source said on Wednesday, in a further sign of a diplomatic thaw with Beijing as tensions with the US rise.
Oil markets also found support from a bigger-than-expected decline in US crude inventories last week.
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