Oil prices regained some ground in early Asian trading on Thursday, following a sharp drop the day before, as geopolitical tensions and new U.S. tariffs sparked expectations of tighter global supplies.
The rebound came after U.S. President Donald Trump announced a steep tariff hike on Indian imports, citing India’s continued purchases of Russian oil. The announcement triggered speculation that supply chains could be disrupted, especially if major buyers are forced to diversify away from Moscow’s barrels.
Brent crude futures for October climbed 0.9% to $67.48 per barrel, while West Texas Intermediate (WTI) rose 0.9% to $63.98 by 21:43 ET (01:43 GMT).
Trump Moves Against India, Eyes China Next
In a move aimed at increasing pressure on the Kremlin, Trump signed an executive order on Wednesday raising tariffs on Indian imports to a cumulative 50%, set to take effect 21 days after August 7. The White House cited India’s ongoing Russian oil imports as justification for the decision.
Trump also warned that China could face similar penalties over its energy trade with Russia. Both countries are among the largest global importers of oil.
The tariff escalation forms part of Washington’s broader strategy to squeeze Moscow’s wartime revenues. In parallel, top U.S. officials arrived in Moscow this week to continue ceasefire negotiations, with Trump potentially meeting President Vladimir Putin in the near future to discuss the Ukraine conflict.
These developments raised concerns about disruptions in the global oil market, should major buyers pivot away from Russian supply and compete for alternative sources.
Analysts Caution Over Timing and Negotiations
While the move pushed oil prices higher, analysts at ANZ pointed out that the 21-day grace period for the Indian tariffs might allow room for diplomatic talks to defuse the situation.
Oil Still Faces Broader Market Headwinds
Despite Thursday’s recovery, oil prices remain under pressure from persistent worries over weakening global demand and rising OPEC+ output.
The OPEC+ group recently agreed to raise production levels significantly in September, continuing to reverse earlier output cuts that had supported prices. The increase comes as member states seek to recover lost revenues amid sluggish oil prices.
Meanwhile, soft economic data from both the U.S. and China have heightened concerns about slowing global consumption, further weighing on market sentiment.
There was, however, a glimmer of optimism from U.S. inventory data: crude stockpiles unexpectedly fell by 3 million barrels last week, versus expectations for a modest 0.2 million barrel increase, suggesting domestic demand may still be holding up.
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