Oil Price Drop as U.S. Slams 50% Tariff on Indian Imports
Oil prices dropped in the global commodity market in Friday as the U.S imposed additional tariffs on Indian goods, threatening $87 billion in exports. The U.S tariffs on India fuelled trade concerns and expectations of weaker fuel demand with the end of the summer driving season.
Brent crude was trading at $67.44 per barrel, down 0.2% from the previous close of $67.60. US benchmark West Texas Intermediate (WTI) fell 0.3% to $63.89 from $64.07 in the prior session.
US President Donald Trump doubled tariffs on India to 50% from 25% over the country’s purchases of Russian crude. Analysts warned the measures threaten India’s $87 billion in exports to the US, a step that could damp economic growth and curb energy demand in the near term, adding further pressure on oil prices.
However, oil prices remain on track for an almost 0.2% weekly gain despite Friday’s losses. The US economy expanded by 3.3% quarter-on-quarter in the second quarter of the year, exceeding the preliminary estimate of 3%. The data is supporting prices on expectations that it will bolster the demand outlook in the world’s biggest oil consumer.
Meanwhile, traders are pricing in an 85% chance of a 25-basis-point rate cut by the Fed in September, with another reduction expected by year-end. Fed Governor Christopher Waller said he would back a quarter-point move next month, adding that he sees room for additional cuts over the next three to six months.
Lower rates are expected to boost growth and lift demand in oil-reliant sectors, supporting prices, according to analysts. Investors are focused on the personal consumption expenditures price index due Friday, a key inflation gauge for the Fed that could help shape monetary policy in the months ahead.
Moreover, data indicating a fall in US crude inventories further supported upward price movements, signaling strong demand in the world’s largest oil-consuming nation. US crude inventories fell by around 2.4 million barrels to 418.3 million barrels, above the forecasted fall of 1.7 million barrels, according to data from the US Energy Information Administration (EIA).
Over the same period, gasoline inventories decreased by approximately 1.2 million barrels to 222.3 million barrels.
Supply pressure is expected to push oil back to $70 per barrel. During the week, Russia extended the gasoline export ban until October 31 in an effort to lower fuel prices, which have spiked following Ukrainian attacks on refineries.
The decision was made regarding gasoline exports to stabilize the domestic market, the Russian government announced in a statement. Gasoline export bans are extended to October 31 for both producers and non-producers, and restrictions on producers are planned to be lifted starting October 1, it added.
Following record-high prices domestically, the Russian government temporarily banned gasoline exports on July 28 until August 31.
Despite this, prices continued to rise. The country experiences periodic increases in gasoline prices due to oil refineries being targeted by unmanned aerial vehicle (UAV) attacks by Ukraine and increased demand, particularly in the agricultural sector.
Russia, one of the world’s largest energy exporters, produces over 40 million tons of gasoline each year. # Oil Price Drop as U.S. Slams 50% Tariff on Indian Imports How to Make Money from Stocks, Forex or Cryptocurrency Trading
