Global oil prices showed a confident increase on August 6 after US President Donald Trump threatened India with higher tariffs in response to its purchase of oil from the Russian Federation. Despite a drop in prices to their lowest levels in the past five weeks the day before, the market quickly reacted to the new geopolitical risks.
This is reported by Finway
Dynamics of Global Oil Prices
The price of Brent crude oil futures rose by 43 cents, reaching $68.07 per barrel. US WTI crude oil also increased by 40 cents, reaching $65.56 per barrel. Experts note that the statements made by the US President were a key factor in the short-term rise in the value of “black gold.”
Customs Threats and Geopolitical Uncertainty
Donald Trump’s threats to raise tariffs on Indian goods are driven by the country’s purchases of Russian oil. The US President also stated that lower energy prices could serve as an incentive to halt Russia’s military aggression against Ukraine. ING analysts warn that after India, US pressure may intensify regarding China, as uncertainty remains about the potential implementation of customs restrictions for other importers of oil from the Russian Federation.
“If India stops buying Russian oil amid customs threats, we believe the market will be able to cope with the loss of this supply,” they added.
An additional factor contributing to the price increase was information about a reduction in oil inventories in the US. According to sources, last week crude oil stocks in the country decreased by 4.2 million barrels, which also supported market strengthening.