Oil prices are tentatively ending a five-day losing streak (+0.65%), pressured recently by escalating trade tensions between India and the US. Prices remain under strain due to a planned production hike of over half a million barrels in September, although Saudi Arabia’s pricing actions suggest confidence in demand.
The drop in oil was triggered by President Donald Trump’s decision to impose a 25% tariff on Indian imports, criticizing India for buying Russian oil and allegedly funding the war in Ukraine. The tariff has since increased to 50%, hitting key Indian exports like textiles, auto parts, and seafood.
Trump also hinted at possible similar tariffs on China, though insiders say this is unlikely. Even White House adviser Peter Navarro admitted that further tariffs could harm the US economy.
Speculation in the oil market has also been fueled by a Kremlin statement that Trump and Putin may meet in the coming days. The announcement followed a visit to Moscow by Trump’s special envoy to the Middle East Steve Witkoff, who reportedly suggested a three-way summit involving Trump, Putin, and Zelensky — though the Kremlin has not responded to that idea.
The trade turmoil is unfolding alongside debates on oil production. Saudi Arabia raised prices for Asian buyers for a second consecutive month, slightly easing concerns about oversupply. Strong demand for transport fuels continues to support refining margins. Still, the kingdom sharply cut prices for Europe and only slightly increased them for the US. Overall, the September production hike will fully reverse voluntary cuts made post-COVID, potentially creating further downward pressure in the second half of 2025.
Source: xStation5
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