Oil prices were little changed on Wednesday, after falling in the previous session, as the market awaits massive new U.S. tariffs on India, the world’s third-largest crude consumer, in response to its purchases of Russian supply.
The U.S. is set to impose additional tariffs of 25% on Indian exports at 12:01 a.m. EDT (0401 GMT) on Wednesday, taking them to 50% overall and among the highest levied by Washington.
U.S. President Donald Trump has said the higher charges are a result of India’s Russian oil buying, which increased following Russia’s invasion of Ukraine as Western sanctions led Russia to discount its cargoes.
Brent crude futures rose 2 cents to $67.24 per barrel at 0133 GMT, while West Texas Intermediate (WTI) crude futures were flat at $63.25.
Both contracts fell over 2% on Tuesday after beginning the week on a two-week high.
“Investors remain on edge as additional tariffs on India in response to its purchases of Russian crude hang over the market,” said Daniel Hynes, senior commodity strategist at ANZ, in a note on Wednesday.
Indian refiners initially curbed their Russian crude purchases following the U.S. tariff announcements and after stricter European Union sanctions on Russian-backed Indian refinery Nayara Energy.
However, state-owned refiners Indian Oil and Bharat Petroleum have resumed buying Russian supplies for September and October, company sources said last week. Indian Oil, the country’s biggest refiner, has said it will continue to buy Russian crude depending on the economics.
That has led some analysts to question how much impact the higher U.S. tariffs will have on Indian purchases.
“The secondary tariff has not been enough to stop India from buying Russian oil. The market will be watching Russian oil flows to India closely going forward to gauge the impact, if any, of secondary tariffs,” Warren Patterson, head of commodity strategy at ING, said in a note.
The war in Ukraine is influencing the oil market in other ways as Ukrainian drone attacks on Russian refineries are cutting their operations, requiring them to export the crude they cannot process.
Russia has revised up its crude oil export plan from western ports by 200,000 barrels per day in August from the initial schedule after attacks last week, three people familiar with the matter said on Tuesday.
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