Trump Trade War: Tariffs on Russian Oil Buyers Shake Energy Markets and Oil Prices

US President Donald Trump has expanded his tariff strategy to the energy sector, imposing duties on Indian goods over its imports of Russian oil. This marks the first direct financial penalty on Russia’s energy exports in his second term. These secondary tariffs aim to cut Russia’s oil revenues and pressure its top buyers, risking tighter global supply and greater market volatility.

Trump’s Tariffs Target Russian Oil Buyers, Raising Energy Market Risks

US President Donald Trump has expanded his tariff strategy into the energy sector. The administration imposed an extra 25% tariff on goods from India over its imports of Russian oil. The move comes with a warning that China, the largest buyer of Russian crude, could face similar measures.

Secondary tariffs aim to pressure Moscow’s top customers and cut oil revenues funding Russia’s war in Ukraine. The approach could severely disrupt Russian oil sales if applied to both India and China. However, it also risks a tighter global supply. These actions would likely induce another layer of volatility in the oil prices, increasing inflationary pressures worldwide.

Oil markets have already priced in some supply risk from the geopolitical standoff. Russia, the world’s second-largest oil exporter, has been rerouting crude from Europe to Asia since the West’s 2022 price cap. That cap allowed discounted Russian oil to keep flowing, limiting market shocks. However, the new tariffs could significantly alter this balance and impact the energy sector.

Energy Sector Braces for Price Swings and Market Uncertainty

The uncertainty in the oil prices could directly impact the global energy sector. For oil producers, reduced Russian supply would lift benchmark crude prices, boosting revenues. US energy companies, particularly in shale production, could benefit from higher margins. However, for refiners and fuel distributors, the cost increases may squeeze profits and raise prices for consumers.

The ripple effect could extend to natural gas and renewable energy markets. If the oil prices increase, investment flows may shift toward alternative energy to hedge against volatility. However, the short-term disruptions in trade with India and China could slow clean energy cooperation and technology exchange.

The chart below shows the one-year price performance of four major US energy companies. Chevron Corporation (CVX) is the only gainer, up 6.91% as of August 11, 2025. However, Exxon Mobil Corporation (XOM) is down 10.14%, Valero Energy Corporation (VLO) is down 11.78%, and ConocoPhillips (COP) has fallen the most, down 13.53%. The declines reflect volatility from tariff threats, geopolitical tensions, and supply risks. Oil price swings in early 2025 also drove sharp moves, with the tariff news adding pressure on the sector’s outlook.

Crude Oil Technical Analysis

Crude Oil Monthly – Long-Term Resistance Near $70

The monthly chart for WTI crude oil (CL) shows bearish momentum below the long-term resistance of $70. The price has broken out of a symmetrical triangle pattern and is forming negative price action.

A decisive break below the $58–$60 support zone would confirm the start of the next bearish trend. In the broader long-term timeframe, oil prices are still trading within a descending channel, indicating persistent volatility. This short-term price action reflects the ongoing tug-of-war between bullish momentum and bearish pressure in the market, as the price comes out of a symmetrical triangle.

Crude Oil Weekly – Bearish Risks on Tariffs and Geopolitical Tensions

The weekly chart for WTI crude oil shows weakness, with the price breaking below its triangle pattern. The strong uncertainty in the stock and oil markets, driven by Trump’s tariff announcement and the geopolitical crisis in the Middle East, has fueled sharp price movements and heightened volatility.

This volatility is shaping a bearish pattern. A break below the $55 level would confirm the next leg lower in oil prices.

ExxonMobil Faces Bearish Setup as Prices Fail to Break $120 Resistance

Since oil prices are trending lower, Exxon Mobil Corporation is also forming a strong bearish pattern. The weekly chart shows the development of a rounding top, with prices repeatedly failing to break above the $120 level in recent months.

A break below the $96 region would break the ascending broadening wedge and confirm a strong negative trend. This breakout could trigger a significant decline in ExxonMobil’s share price.

Valero Energy Price Action Weakens After July Highs

On the other hand, Valero Energy Corporation is also showing bearish price action. The price failed to break above the $155 level in July 2025. The drop from the July highs is forming a bearish setup, with the next support lying at the lower boundary of the descending channel.

The long-term support at $100 remains valid, and a break below this level could trigger a strong decline in Valero’s share price. However, a break above $155 would be bullish and could send prices higher.