Crude Oil Hits New Highs as US Threatens Tariffs on Indian Imports of Russian Oil

Highlights:

• Brent crude climbs 1.4% to US$73.37 a barrel at the time of writing.
• US threatens 25% tariff on Indian imports of Russian oil, sparking global supply concerns.
• Nayara Energy cuts refinery output as tensions escalate and refined product markets tighten.

Tariff Threat Stokes Supply Worries

Crude oil prices surged to their highest level since June after US President Donald Trump issued a warning to India regarding its energy trade with Russia. Trump threatened to impose a 25% tariff “plus a penalty” on Indian imports of Russian crude, intensifying market concerns about a potential global supply crunch. At the time of writing, Brent crude was trading 1.4% higher at US$73.37 per barrel, driven by the potential disruption to global oil flows.

India Responds Amid Global Market Jitters

President Trump criticised India for continuing to be one of the top purchasers of Russian energy, a stance that drew swift attention from Nayara Energy, one of India’s major refiners. In response, Nayara has reportedly scaled back processing rates at one of its refineries.

Analysts at ANZ Bank noted that the heightened geopolitical tensions have increased concerns over disruptions in refined fuel markets, further supporting oil prices.

Demand Outlook Remains Strong

Crude prices also found support in robust US economic indicators. The latest data showed that the inflation-adjusted GDP grew by 3% in the June quarter, signalling resilient demand in the world's largest economy.

Stockpile Surge Limits Further Gains

Despite bullish sentiment, gains were tempered by the US Energy Information Administration's report showing a 7.7 million barrel increase in crude inventories—the largest weekly build since January.

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