SINGAPORE: Oil prices held mostly steady on Tuesday after three consecutive days of declines. The market remained under pressure due to growing fears of oversupply following OPEC+’s latest decision to increase production. However, the risk of further disruptions to Russian oil supplies helped limit the losses.
As of 0036 GMT, Brent crude futures were flat at $68.76 a barrel. US West Texas Intermediate (WTI) crude edged down by 2 cents to $66.27 a barrel, a drop of just 0.03 percent. Both benchmarks had slipped more than 1 percent in the previous session, hitting their lowest levels in a week.
OPEC+, which includes the Organization of the Petroleum Exporting Countries and its allies, accounts for about half of the world’s oil production. The group had been restricting output for several years to support prices. But this year, it has started ramping up production to regain lost market share.
In its latest move, OPEC+ announced on Sunday that it would raise output by 547,000 barrels per day (bpd) in September. This represents a full and early reversal of its biggest batch of cuts, which had reduced supply by roughly 2.5 million bpd, or about 2.4 percent of global demand. Still, analysts believe the actual increase in supply may fall short of the headline figure.
At the same time, geopolitical tensions are adding to uncertainty in the oil market. The US has urged India to reduce its imports of Russian oil, as part of Washington’s efforts to pressure Moscow into ending the war in Ukraine.
President Donald Trump has warned of imposing a 100 percent secondary tariff on countries that continue to buy Russian crude. This follows a 25 percent tariff introduced in July on Indian imports.
India, which has become Russia’s biggest seaborne oil customer, imported around 1.75 million bpd of Russian crude from January to June this year. That’s a 1 percent increase compared to the same period last year, according to trade data shared with Reuters.
“India has become a major buyer of the Kremlin’s oil since the 2022 invasion of Ukraine,” said Daniel Hynes, senior commodity strategist at ANZ. “Any disruption to those purchases would force Russia to look for new buyers from a shrinking pool of allies.”
Meanwhile, traders are also watching for updates on broader US trade policies. Any fresh tariffs on key trading partners could slow global economic growth and reduce demand for fuel.
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