Oil Drops Even as US Raises Pressure on India Over Russian Crude

An oil refinery in Mumbai. Photographer: Abeer Khan/Bloomberg

(Bloomberg) -- Oil fell as traders looked past US efforts to force India to quit buying Russian crude, and broader markets carried a risk-off tone.

Global benchmark Brent dropped below $68 a barrel, while West Texas Intermediate was near $64. White House trade adviser Peter Navarro stepped up the pressure on New Delhi to halt purchases of Russian energy after Washington doubled a levy on imports from the country to 50%. Calling Indians “arrogant,” he cast the conflict in Ukraine as “Modi’s war,” referencing the prime minister.

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Crude has swung between gains and losses this week, with futures on course for the biggest monthly loss since April. Traders are concerned the global oil market faces a surplus in the coming quarters after OPEC+ loosened supply curbs, while nations outside the alliance also ramped up output. The US-led trade war has spurred worries that demand could face headwinds.

India became a major importer of Russian oil after Moscow’s invasion of Ukraine in 2022, pivoting some buying away from traditional suppliers in the Middle East. As the higher US levy came into effect this week, refiners in the South Asian nation have signaled that they intend to press on with crude purchases from Russia for October loading and beyond.

In the US, a government report on Wednesday painted a mixed picture of the domestic oil market. While refinery runs were down in all regions, pulling the nationwide figure to the lowest since early July, crude stockpiles at the hub in Cushing, Oklahoma, fell for the first time in eight weeks.

Although Brent’s prompt spread remains in backwardation, a positive pattern, the closely watched metric has narrowed. The difference between its two nearest contracts was 58 cents a barrel on Thursday, down from 72 cents a month ago.

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