After a Significant Decline Since Early August.. Oil Prices Stabilize

SadaNews - Oil prices have stabilized after recording their largest decline since early August, as investors await the start of higher American tariffs on India due to its purchases of Russian crude.

Brent crude traded near $67 per barrel after falling more than 2% in the previous session, while West Texas Intermediate traded above $63.

The United States is preparing to double tariffs on certain Indian goods to 50% as punishment for the country's purchase of oil from Moscow. With the new rate coming into effect at 12:01 AM Washington time, local refiners in India plan to maintain the bulk of their purchases.

Trump Warns Russia of an "Economic War"

The American move, which does not include China, another major buyer of Russian crude, is part of a broader effort to find an end to the war in Ukraine. U.S. President Donald Trump warned on Tuesday of an "economic war" if he cannot persuade Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky to end the conflict.

Vanadna Hari, founder of "Vanda Insights" for oil market analysis, said: "I don’t see much concern regarding supplies. No directive has been issued by the Indian government to stop purchases of Russian crude, and there is no rationale for Indian refiners to make individual decisions to cut back on purchases as long as there is no clear indication that it would help New Delhi in negotiations."

Concerns Over Supply Excess

Brent crude has lost about 10% of its value this year as the U.S.-led trade war raises concerns about demand, especially as OPEC+ ended voluntary cuts. This has raised fears of a surplus, including predictions from the International Energy Agency of a record surplus next year. Trump said on Tuesday that he welcomes prices close to $60 per barrel, adding that crude will drop "very soon."

In the United States, an industry report showed that national crude inventories fell by only one million barrels last week, along with a decline in gasoline and diesel stocks. Official data is set to be released later on Wednesday.

Some market indicators suggest a short-term tightness in supply, as the spread between the two nearest Brent contracts remains in a bullish structure known as "backwardation." However, longer-term contracts are still in a "contango" structure, which is the opposite pattern.