Oil prices saw a modest rebound in Asian trading on Thursday, recovering from two-month lows after U.S. President Donald Trump intensified trade pressure on India for maintaining oil imports from Russia.
The market was buoyed by a mix of geopolitical tension, supply concerns, and technical bargain-hunting, despite ongoing fears about rising output from OPEC+ and slowing demand worldwide.
By 21:43 ET (01:43 GMT), Brent crude futures for October were up 0.9% at $67.48 a barrel, while WTI futures gained 0.9% to reach $63.98.
Tariff Bombshell Targets India’s Oil Trade
Trump signed a new executive order Wednesday that raises U.S. tariffs on India to 50%, citing New Delhi’s continued energy trade with Moscow. The tariffs will be implemented 21 days after August 7, escalating tensions between Washington and one of Asia’s largest oil consumers.
The U.S. president also hinted at potential tariffs on China, which has similarly increased its purchases of discounted Russian oil.
The move is intended to further isolate Moscow economically and pressure it to end its invasion of Ukraine. Meanwhile, diplomatic efforts appear ongoing: senior U.S. officials landed in Moscow this week, and Trump is reportedly preparing for a potential meeting with Russian President Vladimir Putin to discuss a ceasefire.
Analysts warn that penalizing Russia’s top oil buyers could cause significant disruption in global supply chains — and potentially shift demand toward other oil-producing nations.
Analysts: Negotiation Window Still Open
Still, markets may have time to adjust. “The 21-day grace period for Indian tariffs still left the door open for negotiations,” ANZ analysts noted, suggesting a diplomatic resolution is possible before the levies hit.
OPEC+ Output and Demand Concerns Weigh on Oil
Despite the rebound, oil remains in bearish territory, dragged down by worries over global demand and expanded output from the OPEC+ alliance.
In its latest move, OPEC+ agreed to raise production in September, undoing more of the cuts that had been in place since 2022. The group is eager to boost revenues amid persistent price weakness.
At the same time, macroeconomic data from the U.S. and China continues to disappoint, reinforcing fears that oil demand may be stagnating — especially in key industrial sectors.
However, there was a bright spot in this week’s data. U.S. government figures showed an unexpected 3 million-barrel drop in inventories, versus expectations of a 200,000-barrel increase — a signal that domestic consumption may be more resilient than feared.
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