Among the many side effects of the trade tariffs imposed by the United States on half the planet, there is also the one on PetroleumThese are indeed eventful days for the energy commodity, which is at the center of various analysts' assessments, as well as a rising trend in prices. It all starts with the puzzle in which theIndia, the country that in a few years will be the most populous in the world and among the richest, and which today is already one of the most energy-intensive and for this reason imports a huge amount of oil.
Given the ties within the BRICS group, which in fact revolves around Russia-China-India triangleNew Delhi imports most of its crude oil from Moscow, but US President Donald Trump has decided that this is no longer acceptable and has set India what local diplomats are bluntly calling an "ambush": three weeks to find other oil suppliers, or the 25% tariffs already in place will double to 50%. Trump views the August 27 deadline as an attempt to deprive Moscow of an important source of revenue for its offensive in Ukraine.
The Russia-India-China triangle and the wildcard Brazil
Russia represented almost the 36% of total imports India's crude oil supply will increase by 2024, purchasing about 1,8 million barrels per day at discounted prices. This has saved India billions of dollars in import costs, keeping domestic fuel prices relatively stable. Switching suppliers will likely result in a price increase, but failure to do so will affect the exports of the country governed by Modi. He is now turning to other partners: still within the BRICS world, there would be Brazil, led by his friend Lula, also a major oil producer. The two spoke and agreed on the "need to defend multilateralism." Not only that: according to Indian media, Modi may also visit China at the end of August. And this would be historic, given that it would be his first visit since 2018, although it hasn't been officially confirmed. India and neighboring China have long competed for strategic influence in South Asia, but Trumpism could reshuffle the cards.
India out? A deal for Beijing: Russia offers a discount to the Chinese.
Meanwhile, Russia, which cannot afford to lose allies and commercial outlets for selling gas and oil, is looking to Beijing to address the Indian impasse. According to Bloomberg, Russian Urals crude is now being offered at discounted prices in China, precisely because of the uncertainties surrounding Indian purchases. Spot shipments of Urals to China would represent a significant diversion of Russian oil export flows, Bloomberg reports, and Urals is being offered at a premium of $1,50 over London Brent, down from last week's premium of $2,50 a barrel. And yet, India isn't sitting idly by: the oil situation is still being ironed out, but in the meantime, the slight against the United States has already been returned: New Delhi has plans to purchase new weapons suspended and planes from the US: Times of India reports, adding that the scheduled visit of Indian Defence Minister Rajnath Singh to Washington has been cancelled.
Oil prices rise, but demand may now decline
In all of this, how is the oil market reacting? Crude oil prices fluctuate Amid trade uncertainties related to US tariffs, but also hopes for a detente in the conflict in Ukraine, on which so much depends, the possible meeting announced between Putin and Trump in the coming days (will it actually happen?) may represent hope. The price of a barrel of Brent crude, for delivery in October, is up 0,37% today at $66,67. A barrel of WTI crude, for delivery in September, is up 0,25% at $64,04. The trend is therefore upward, and it's obvious: with these uncertainties, Russian crude exports could be affected by geopolitical dynamics, which should support oil prices. But it could also happen, according to some analysts, that these surcharges will end up decrease global demand of black gold and hence the prices.
