Crude oil futures rose on Thursday after US President Donald Trump announced a fresh 25% tariff on Indian imports, citing India’s continued purchase of Russian oil.
| Photo Credit:
REUTERS/Eli Hartman
Crude oil futures traded higher on Thursday morning after US President Donald Trump announced additional tariffs on India.
At 9.56 am on Thursday, October Brent oil futures were at $67.46, up by 0.85 per cent, and September crude oil futures on WTI (West Texas Intermediate) were at $64.95, up by 0.93 per cent. August crude oil futures were trading at ₹5705 on the Multi-Commodity Exchange (MCX) during the initial hour of trading on Thursday against the previous close of ₹5713, down by 0.14 per cent, and September futures were trading at ₹5638 against the previous close of ₹5642, down by 0.07 per cent.
On Wednesday, Trump announced an additional 25 per cent tariff on imports from India as punishment for India’s purchase of Russian oil. This tariff will be imposed in three weeks.
This will be in addition to the 25 per cent reciprocal tariff on Indian goods, which is scheduled to take effect on August 7.
In response to the US move to impose a total 50 per cent tariff on India, the Ministry of External Affairs (MEA) stated that the action was unfair, unjustified, and unreasonable. India will take all necessary actions to protect its national interests, the MEA said.
Analyst take
Warren Patterson, Head of Commodities Strategy of ING Think, said oil prices pushed lower on Wednesday despite Trump slapping an additional 25 per cent tariff on India for purchasing Russian oil.
The reaction could suggest a few things. Firstly, the market remains hopeful that the tariffs, effective August 27, will ultimately not be implemented. Secondly, the additional tariff will not prompt India to cease buying Russian oil. “Finally, even if India moves to alternative supplies, we may not see a reduction in global supply, with Russia finding other buyers for its oil,” he said.
On the likely meeting between Trump and the Presidents of Russia and Ukraine, he said if this goes ahead, and depending on how things play out, concerns over secondary tariffs may fade.
Stating that countries facing potential secondary tariffs must weigh the benefits of buying discounted Russian crude against the potential cost to trade with the US, Patterson said: “Indian exports to the US total around $87 billion. The savings India amasses from purchasing discounted Russian crude oil will be a fraction of this, something in the region of $6 billion. Therefore, we feel it’s pretty clear: Would India put at risk $87 billion worth of exports to save around $6 billion on oil imports?”
Sanctions deadline
Friday is the deadline that Trump set for Russia to come to a peace deal with Ukraine. Failing to do so means the US could announce further sanctions against Russia, Patterson said.
Meanwhile, official data released by the US EIA (Energy Information Administration) showed a decline in the US crude oil inventories for the week ending August 1.
According to the US EIA, commercial crude oil inventories decreased by 3 million barrels for the week ending August 1. At 423.7 million barrels, US crude oil inventories were about 6 per cent below the five-year average for this time of year.
Total motor gasoline inventories decreased by 1.3 million barrels from last week and were about 1 per cent below the five-year average for this time of year. Distillate fuel inventories decreased by 0.6 million barrels last week and were about 16 per cent below the five-year average for this time of year.
Broader commodities
August natural gas futures were trading at ₹272.10 on MCX during the initial hour of trading on Thursday against the previous close of ₹270/50, up by 0.59 per cent.
On the National Commodity and Derivatives Exchange (NCDEX), August guar gum contracts were trading at ₹9825 in the initial hour of trading on Thursday, against the previous close of ₹9762, up 0.65 per cent.
August cottonseed oilcake futures were trading at ₹3246 on NCDEX in the initial hour of trading on Thursday against the previous close of ₹3240, up by 0.19 per cent.
Published on August 7, 2025