U.S. tariffs on India add fresh pressure to oil market sentiment, with investors now weighing how higher trade barriers could shift global demand and supply flows. Oil prices steadied on Wednesday after a sharp fall in the previous session, with Brent crude at $67.13 per barrel and U.S. West Texas Intermediate at $63.17. Analysts say the added strain from Washington’s new tariffs is colliding with uncertainty around the Ukraine war and Russia’s crude export strategy.
U.S. Tariffs on India Add Fresh Pressure to Oil Market Amid Russia’s Moves
The doubling of tariffs by U.S. President Donald Trump to as high as 50% took effect on Wednesday. He defended the move as a response to India’s continued purchase of discounted Russian oil. Indian refiners initially slowed their Russian crude buying after the announcements, but state-owned giants Indian Oil and Bharat Petroleum have since resumed shipments for September and October. “The secondary tariff has not been enough to stop India from buying Russian oil. The market will be watching Russian oil flows to India closely going forward,” Warren Patterson of ING said.
The new U.S. tariffs on India add fresh pressure to oil market flows because they target one of the world’s biggest crude buyers. India has saved at least $17 billion since 2022 by increasing Russian imports, but analysts warn that as much as $37 billion in exports could be lost this fiscal year if higher duties curb demand for Indian goods.
Ukraine War Drags
While the tariffs dominate headlines, the Ukraine conflict is another key driver of oil volatility. Ukrainian drone strikes on Russian refineries have forced Moscow to boost crude exports by 200,000 barrels per day from western ports. The added shipments have weighed on global benchmarks, even as Washington insists tariffs are necessary to punish Russian-backed energy deals. Vandana Hari of Vanda Insights said, “There is a lot of uncertainty over how the Ukraine stalemate might be resolved, which portends volatility for crude but likely in a relatively small range.”
Bottom Line
The U.S. tariffs on India are coming at a time when the oil market is already unsettled by the war in Ukraine and Russia’s shifting export strategy. For India, the decision adds a new layer of pressure, but refiners appear determined to keep buying Russian crude as long as the economics make sense. For traders, this means more uncertainty ahead, prices could swing as Washington tightens its stance while Moscow looks for fresh buyers. Instead of easing tensions, the tariffs risk deepening the struggle for balance in a market that is already stretched thin.
