Global oil prices stabilized after collapse amid US-India trade deal
Kyiv • UNN
Global oil prices stabilized after a fall caused by the US-India trade deal. India will stop buying Russian oil, increasing imports from the US and Venezuela.
As of February 3, global oil prices are showing signs of stabilization after a massive drop in the previous session, triggered by the de-escalation of geopolitical tensions and new trade agreements from Washington. Brent crude futures are holding at around $66 per barrel, while American WTI is trading above the $62 per barrel mark. This was reported by Bloomberg, writes UNN.
Details
A key factor putting pressure on the market was the statement by US President Donald Trump about the conclusion of a large-scale agreement with Indian Prime Minister Narendra Modi. According to the agreements, India agreed to completely stop purchasing Russian oil in exchange for a reduction in American tariffs on Indian goods from 25% to 18%.
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In addition, Washington canceled the additional 25% "punitive" duty, which was previously introduced precisely because of Delhi's energy cooperation with Moscow. Instead, India pledged to increase imports of energy resources from the US and Venezuela by more than $500 billion.
De-escalation with Iran and sell-off of commodity assets
In parallel with the Indian case, oil prices were affected by news of the possible start of negotiations between the US and Iran on a new nuclear deal.
According to Trump, Tehran demonstrated its readiness for dialogue, which immediately removed the risk premium that had fueled the market throughout January. Oil became part of the general trend of selling off raw materials: the day before, gold fell in price by 10%, and copper by 5%, which indicates a massive exit of investors from protective assets amid optimistic geopolitical expectations.
Consequences for the Russian oil industry
India's refusal of Russian raw materials has already led to a drop in supplies from Russia to Indian ports to their lowest level in the last three years. Analysts note that this creates a significant surplus of unrealized sanctioned barrels in the world and significantly limits the Kremlin's oil and gas revenues. Donald Trump expressed confidence that such economic pressure on Moscow "will help end the war in Ukraine" by depriving Russia of resources for military operations.