Brent plunges as market shifts focus on trade tensions
The front-month ICE Brent contract has moved $1.72/bbl lower on the day, to trade at $71.31/bbl at 09.00 GMT.
IMAGE: An oil pumpjack pictured at dusk. Getty Images
Upward pressure:
US President Donald Trump has issued a fresh warning, targeting Indian imports of Russian crude. He has threatened to slap unspecified penalties for India’s continued purchases of Russian oil and military weapons.
Oil has found some support from “renewed supply disruptions following Trump’s threats this week to impose penalties on India for its energy purchases from Russia,” said ANZ Bank’s senior commodity strategist Daniel Hynes.
The announcement has sparked concerns over a potential supply crunch in the oil market later this year.
“The Indian government has reportedly told state-owned oil refiners to draw up plans to switch away from Russian crude,” said VANDA Insights’ founder Vandana Hari.
Downward pressure:
Brent’s price has moved lower as market participants shifted focus on US import tariffs on trade partners set to come into effect from today.
Yesterday, Trump signed an executive order imposing tariffs ranging between 10-41% on US imports from several countries including Canada, India, Taiwan, China, etc., Reuters reports.
The tariffs come as a result of the failure to finalise trade agreements by the 1 August deadline.
If imposed, it could lead to trade disputes between the US and its major economic partners, according to market analysts.
“Renewed focus on the economic headwinds of higher US import tariffs globally prompted a retreat in Brent,” Hari added.
By Aparupa Mazumder
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