Oil prices halt losses as traders weigh Ukraine war, US tariffs on India

SINGAPORE: Global oil prices steadied on Wednesday after a sharp fall in the previous session, as traders kept a close eye on the Ukraine war and the impact of fresh US tariffs on India, the world’s third-largest crude consumer.

Brent crude futures inched up by 1 cent to $67.32 a barrel at 0354 GMT, while West Texas Intermediate (WTI) crude futures gained 8 cents to trade at $63.33. Both benchmarks had slipped by more than 2 percent on Tuesday, erasing much of the momentum built at the start of the week when prices touched a two-week high.

Ukraine war keeps market cautious

Uncertainty over the Ukraine conflict remains the key driver of sentiment. Vandana Hari, founder of oil market analysis firm Vanda Insights, said the stalemate was keeping prices in a narrow but volatile range.

“Much of the Ukraine peace discount has been reversed, but the market is also not ready to price in a major supply risk premium,” she noted.

US special envoy Steve Witkoff said on Tuesday he would meet Ukrainian officials in New York this week. Washington is also holding separate talks with Moscow in an effort to end the conflict.

Meanwhile, drone attacks by Ukraine on Russian refineries have forced some plants to cut operations, pushing Moscow to increase exports. Russia is expected to ship an additional 200,000 barrels per day of crude from its western ports in August compared with its earlier schedule, according to sources familiar with the matter.

Tariffs cloud India’s buying outlook

Another factor shaping the market is the new round of US tariffs on India. Washington raised duties on Indian exports by 25 percent from Wednesday, taking them to 50 percent overall. The move came in response to New Delhi’s continued imports of discounted Russian crude.

Although Indian refiners briefly reduced purchases following the tariff announcement and tighter European sanctions on Nayara Energy, state-owned companies such as Indian Oil and Bharat Petroleum have since resumed orders for September and October.

Indian Oil, the country’s biggest refiner, has said it will continue to buy Russian crude as long as it makes economic sense. Analysts believe the higher tariffs may not be enough to dent India’s appetite.

“The secondary tariff has not been enough to stop India from buying Russian oil,” said Warren Patterson, head of commodity strategy at ING. “The market will be watching Russian oil flows to India closely to gauge the impact.”

For now, traders remain cautious, with prices moving in small increments as the market balances geopolitical risks with demand prospects.