Oil prices rebound after Trump threatens tariffs on Russian crude buyers
Oil prices rebounded on Wednesday following a sharp decline the previous day, as concerns over potential supply disruptions resurfaced after U.S. President Donald Trump threatened to impose tariffs on countries purchasing Russian crude oil—specifically targeting India.
Brent crude futures rose by 48 cents, or 0.7%, reaching $68.12 a barrel by 06:45 GMT. U.S. West Texas Intermediate (WTI) crude climbed 43 cents, or 0.7%, to $65.59, News.Az reports, citing Reuters.
The recovery in oil markets comes amid growing uncertainty over whether the United States will follow through with secondary tariffs aimed at buyers of Russian oil. According to ING commodity strategists, market speculation is intensifying around the possibility that China may also face scrutiny for its continued imports of Russian crude.
While India remains a key buyer of Russian oil, analysts at ING noted that the market could absorb a loss of Indian demand. However, a broader pullback from Russian oil by other countries would pose a greater threat to global supply.
Both major oil benchmarks had fallen over $1 on Tuesday, marking their lowest closing prices in five weeks and extending losses for a fourth consecutive session. This drop was largely driven by expectations of increased supply, as OPEC+ announced plans to boost oil output by 547,000 barrels per day in September.
Yuki Takashima, an economist at Nomura Securities, said investors are closely watching whether India will reduce its Russian oil purchases in response to the tariff threats. If India maintains its current import levels, WTI prices are expected to remain within the $60-$70 range for the remainder of the month, he added.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and its allies, agreed on Sunday to raise production—effectively ending a recent output cut earlier than anticipated. The group, which produces around half of the world’s oil, has been gradually increasing production this year in a bid to regain market share.
Meanwhile, the Trump administration’s pressure on India to stop buying Russian oil is part of Washington’s broader effort to economically pressure Moscow into pursuing a peace agreement in Ukraine. Trump on Tuesday warned that tariffs on Indian goods could be imposed within 24 hours if New Delhi does not comply. He also suggested that falling energy revenues might eventually force Russian President Vladimir Putin to end the war.
India responded by calling the threat “unjustified” and pledged to protect its economic interests, signaling growing tension in U.S.-India trade relations.
Adding to the oil market’s momentum, data from the American Petroleum Institute showed a larger-than-expected drop in U.S. crude inventories, which fell by 4.2 million barrels last week. Analysts had forecast a draw of just 600,000 barrels. The U.S. Energy Information Administration is set to release official data later on Wednesday.
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