Oil Prices Steady as Ukraine War, U.S. Tariffs on India Weigh on Market

Oil prices steadied on Wednesday following a sharp drop in the previous session, as traders assessed the latest geopolitical and trade developments affecting global energy markets.

Brent crude futures slipped 9 cents to $67.13 a barrel at 8:33 a.m. Saudi time, while U.S. benchmark West Texas Intermediate was down 8 cents at $63.17. Both benchmarks had declined by more than 2 percent on Tuesday after touching a two-week high at the start of the week.

Market analysts said the ongoing war in Ukraine remains a key factor shaping sentiment, though its impact on prices is proving difficult to quantify. “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,” said Vandana Hari, founder of energy consultancy Vanda Insights. “Much of the Ukraine peace discount has been reversed, but the market is not ready to price in a major supply risk premium.”

Diplomatic efforts continue, with U.S. special envoy Steve Witkoff confirming that he will meet Ukrainian representatives in New York this week, while also holding discussions with Russia. Washington has sought to mediate an end to the conflict, though little progress has been made so far.

At the same time, investors are weighing the impact of a new round of U.S. tariffs on India, the world’s third-largest crude importer. President Donald Trump’s decision to double duties on Indian goods to as much as 50 percent took effect on Wednesday, a move linked to New Delhi’s continued purchases of Russian oil.

Indian refiners initially scaled back Russian imports following the tariff announcement and tighter European Union sanctions on Nayara Energy, a refinery with Russian backing. However, state-owned Indian Oil and Bharat Petroleum have since resumed purchases for September and October. Indian Oil, the country’s largest refiner, said it would continue to buy Russian crude depending on market conditions.

“The secondary tariff has not been enough to stop India from buying Russian oil,” noted Warren Patterson, head of commodities strategy at ING. “The market will be watching Russian oil flows to India closely going forward to gauge the impact, if any, of secondary tariffs.”

India has saved an estimated $17 billion by increasing imports of discounted Russian crude since early 2022. Analysts at New Delhi-based think tank Global Trade Research Initiative warned that additional tariffs of up to 50 percent could reduce India’s exports by more than 40 percent — nearly $37 billion — in the current fiscal year.

Meanwhile, Ukrainian drone attacks on Russian refineries are further reshaping trade flows. Disruptions to processing capacity have forced Russia to increase crude exports, with volumes from western ports set to rise by 200,000 barrels per day in August, according to sources familiar with the matter.

With the Ukraine war showing no signs of resolution and trade tensions escalating, analysts expect oil markets to remain volatile in the weeks ahead.