Trump’s drums of liberation are relentless, and India is the latest country on the receiving end of that “liberation”. Perhaps, a special gift ahead of India’s Independence Day next Friday. An additional 25% tariff was announced on India, with the grievance being their continued purchase of Russian crude oil. The new rate will come into effect on 27 August, and markets will watch closely. The timing is especially peculiar, as Trump is desperately seeking an end to the war in Ukraine (and distract from the Epstein files), and might be meeting Putin in person next week. Long time no see. Russia might lose one of its best customers in India, while Russian crude oil makes up 37% of India’s crude consumption, precisely the wedge that Trump has created. Indian refiners have not yet curbed purchases of Russian oil, and it is unclear how around 2mb/d of Russian crude can be replaced. The Middle East is the immediate option, and Aramco gets it, as they raised September OSPs to Asia. Trump faces the risk of severe market tightness and higher oil prices. Trump may have been reading our global oil balance, where we see the implied stock change for 2025 at 1.7mb/d. The physical market remains unfazed, with Oct/Nov’25 Brent futures down from $1 to $0.55/bbl w/w, giving back all of last week’s gains. Oct’25 Brent is also down from $72 to $67/bbl over the week. As it stands, the market is pricing in a higher chance of a Russia-Ukraine ceasefire, rather than a meaningful supply disruption.
