Oil rose in a choppy session as a Trump administration trade official signaled that tariffs on India over Russian crude purchases could rise further. West Texas Intermediate extended gains to settle above $63 a barrel for October delivery, while Brent crude finished near $68. The moves come after Peter Navarro said tariffs on India could double on August 27 as punishment for buying Russian oil. Over the last 10 sessions, U.S. oil futures have traded in a tight range around $62 to $65.
The market is navigating a patchwork of drivers. On the geopolitical front, prospects for a Russia-Ukraine ceasefire have traders weighing the potential impact on crude flows. A peace deal could ease some sanctions pressures on Russia’s exports, though Moscow has kept its oil flowing amid sanctions so far. In the United States, crude stockpiles offered a mixed picture: a sizable weekly decline was reported—the largest since mid-June—while Cushing, Oklahoma, storage rose for a seventh straight week. The Permian Basin continues to feed more supply into the market, underscoring the ongoing tug-of-war between output gains and demand.
Oil has shed more than 10% this year amid concerns tariffs could dampen growth just as OPEC+ members restart idle production, fueling fears of a supply glut later in the year. Gasoline inventories fell for a fifth consecutive week, a reminder that global inventories remain historically tight even if a later-year surplus is anticipated by some. Jet-fuel demand remains robust, helping to temper broader weakness.
Analysts note that the market is being pulled by a mix of bullish and bearish forces, all within thin summer liquidity. “The market is boxed in by competing signals—geopolitical risk, supply increases from key producers, and varying demand indicators,” said Ole Hansen, head of commodity strategy at Saxo Bank.
What to watch next
– The risk of higher tariffs on India tied to Russian oil purchases could influence crude flows and regional trade dynamics.
– U.S. inventory data and evolving refinery activity will continue to shape near-term price moves.
– Any developments toward a Russia-Ukraine ceasefire could alter the trajectory of sanctions and Russian crude exports.
– OPEC+ output plans and seasonal demand patterns will influence the balance between supply and consumption as summer winds down.
Additional analysis
– The price action suggests traders remain cautious, assigning weight to both potential policy shocks and the prospect of a return of supply from OPEC+ members. If demand signals strengthen, prices could test the upper end of recent ranges; if tariff tensions or economic headwinds intensify, the market could re-enter a tighter trading band or pull back.
Overall, the commodity market is balancing optimism about demand resilience with worries about policy restrictions and the evolution of supply, keeping prices in a narrow, watchful range for now.