Earlier this week, the Trump doubled levies on all Indian imports to 50% as a penalty for the nation taking Russian crude, prompting local state-owned oil refiners to pull back from purchases and look elsewhere. Treasury Secretary Scott Bessent, meanwhile, said the US may also impose tariffs on China at some point, when asked about targeting countries that buy Moscow’s energy.
Oil has slumped in August following three months of gains. Investors are braced for a potential glut later this year after OPEC+ followed through on a campaign to relax output curbs. At the same time, crude futures have been weighed down by signs of slower growth in the world’s largest economy as Trump’s wider trade tariffs took a toll on activity, posing a risk to energy demand.“Positive signals from this week’s US-Russia talks — and plans for a direct Trump-Putin meeting — have eased concerns over Russian supply disruptions, causing a significant retreat in geopolitical risk premiums,” said Gao Mingyu, chief energy analyst at SDIC Essence Futures Co. The market may shift toward more bearish sentiment, driven by pessimistic supply-demand fundamentals, given the peak season will be over soon, she added.
Brent’s prompt spread — the difference between its two nearest contracts — shows that near-term conditions have become less tight. The widely watched metric has narrowed to 53 cents a barrel in backwardation, compared with a differential of more than $1 a barrel a month ago.
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