The oil market has stabilized and is waiting for new developments in the Russian-Ukrainian war
27 August 09:01
World oil prices stabilized on Wednesday after falling in the previous trading session. The market is expecting changes in the Russian-Ukrainian war, and investors are assessing the impact of new large-scale U.S. duties on India – the third largest consumer of crude oil in the world. This is reported by "Komersant Ukrainian" with reference to Reuters.
Brent crude futures rose 1 cent to $67.32 a barrel as of 07:00 Kiev time, while West Texas Intermediate (WTI) crude futures rose 8 cents to $63.33.
Both contracts fell more than 2 percent on Tuesday after starting the week from a two-week high.
“There is a lot of uncertainty about how the Ukrainian stalemate might be resolved, which suggests volatility for crude oil, but probably within a relatively narrow range. Much of the Ukrainian peace discount has been lifted in the last week, but the market is also not willing to put a significant supply risk premium on the price.”
– said Vandana Hari, founder of analyst firm Vanda Insights.
Duties against India have been imposed
At 07:01 Kiev time on Wednesday, an additional 25% duties were imposed on Indian exports, bringing their total to 50%, one of the highest imposed by Washington. This makes traders uncertain about the market’s direction.
U.S. President Donald Trump has said the higher duties are a consequence of India’s purchase of Russian oil, which has risen since Russia’s invasion of Ukraine.
Indian refiners initially cut purchases of Russian crude after the announcement of U.S. duties and after the European Union tightened sanctions against Nayara Energy, an Indian refinery linked to Russia.
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 largest refiner, has said it will continue to buy Russian crude depending on economic viability.
That has led some analysts to question how big an impact the increased U.S. duties will have on Indian purchases.
“The secondary duty was not enough to stop India from buying Russian crude. The market will closely monitor Russian crude oil flows to India in the future to assess the impact, if any, of the secondary duties,”
– warren Patterson, head of commodity markets strategy at ING, said in a note.
The war in Ukraine is affecting the oil market in other ways, as Ukrainian drone attacks on Russian refineries are cutting back on their operations, forcing them to export crude they can’t refine.
Russia has revised its plan to export crude from western ports, increasing its crude exports by 200,000 bpd in August from its original schedule after last week’s attacks, three people familiar with the situation said Tuesday.
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