Oil Prices Steady as Market Monitors Ukraine Conflict and U.S. Tariffs on India

NEW DELHI, Aug 27: Oil prices remained steady on Wednesday after a sharp drop in the previous session, as investors focused on developments in the Ukraine conflict and assessed the potential impact of new U.S. tariffs on India – the world’s third-largest crude consumer.

As of 03:54 GMT, Brent crude inched up by 1 cent to $67.32 per barrel, while West Texas Intermediate (WTI) rose 8 cents to $63.33 per barrel. Both benchmarks had fallen more than 2% on Tuesday after hitting a two-week high earlier this week.

Uncertainty in Ukraine Keeps Oil Market in a Narrow Range

Vandana Hari, founder of oil market analysis firm Vanda Insights, said:
“There’s still a lot of uncertainty around how the Ukraine stalemate might be resolved, which suggests volatility for crude but likely within a relatively narrow range. Most of the peace discount has been unwound over the past week, but the market is not yet ready to price in a major supply risk premium.”

U.S. Special Envoy Steve Witkoff announced that he would meet Ukrainian representatives in New York this week and confirmed that Washington is also holding talks with Moscow in an effort to end the war.

Impact of U.S. Tariffs on Indian Oil Imports

In addition, the U.S. plans to impose an additional 25% tariff on Indian exports starting Wednesday at 12:01 a.m. EDT (0401 GMT), bringing the total to 50% – among the highest tariffs ever imposed by Washington. President Donald Trump stated that the decision comes in response to India’s increasing purchases of Russian oil following Moscow’s invasion of Ukraine, which pushed Russia to offer deep discounts on its crude.

Initially, Indian refiners scaled back Russian crude purchases after the U.S. tariff announcements and stricter EU sanctions on Russian-backed Nayara Energy. However, state-run refiners such as Indian Oil and Bharat Petroleum have resumed buying Russian supplies for September and October, sources said.

Indian Oil, the country’s largest refiner, indicated it would continue to buy Russian crude as long as the economics make sense. This raises questions among analysts about the real impact of higher U.S. tariffs on Indian oil procurement.

Russia Increases Crude Exports After Drone Attacks

“The secondary tariffs have not been enough to stop India from purchasing Russian oil. The market will closely watch Russian crude flows to India to gauge any impact from these additional tariffs,” said Warren Patterson, Head of Commodities Strategy at ING.

Meanwhile, the Ukraine war is also influencing the oil market through other channels. Recent Ukrainian drone strikes on Russian refineries have forced Moscow to export crude that it cannot process domestically.

According to sources, Russia has revised its crude oil export plan from western ports, adding an extra 200,000 barrels per day for August compared to the initial schedule, following last week’s attacks.