Oil prices stabilized after the longest series of declines for Brent since May as traders assess geopolitical risks and wait for Donald Trump's next steps to resolve the Russia-Ukraine conflict;

Details

Brent crude oil prices rose on Friday, August 8, by 0.4% and settled just above $66 per barrel. Earlier in the day, growth reached 1%. Traders are waiting for further actions by U.S. President Donald Trump aimed at ending the war in Ukraine, explains Bloomberg. The day before, on August 7, Moscow confirmed that Trump will soon hold a meeting with Russian President Vladimir Putin - for the first time since the conflict began in 2022. Those talks could take place as early as next week, the Kremlin allowed.

An additional sign of easing tension in the market was the reduction of the spread on the nearest Brent contracts, the agency notes. Now this difference is 58 cents per barrel, while a month ago it exceeded $1. This indicates a reduction in short-term deficit, Bloomberg writes.

Why did oil get cheaper?

This week, the U.S. doubled duties on imports from India to 50% - as punishment for buying Russian oil. This has forced India's state-owned refiners to cut purchases and start looking for alternative suppliers, Bloomberg notes. 

India is the world's third-largest importer and consumer of oil. In January-June this year, it received about 1.75 million barrels of Russian oil per day - 1% more than a year earlier, according to data cited by Reuters. Russia continued to be the largest supplier to India in the first half of the year, accounting for about 35% of total oil shipments, the agency said.

U.S. Treasury Secretary Scott Bessent in late July admitted and the possibility of imposing duties against China - if the country continues to buy Russian energy resources. Against the backdrop of these developments, oil has been falling in price since early August after three months of rising prices.

Investors are also wary of oversupply in the market, which may arise due to OPEC+'s decision to significantly ease production restrictions from September. Additional pressure on prices comes from signs of a slowdown in the U.S. economy caused by continued duty hikes, which could negatively affect energy demand.

"Geopolitics still remains the main factor affecting oil quotations. The market does not put a supply deficit in the price, as the growth of oil costs contradicts the interests of the United States. In these conditions, it is difficult for prices to develop sustainable growth," said Tamas Varga, an analyst at broker PVM, he was quoted by Bloomberg.

This article was AI-translated and verified by a human editor

Share