Trump Trade War: U.S. Tariff Threats on India Reshape Global Oil Market

The situation in the global energy sector is evolving at a rapid rate. The United States would not prefer that countries purchase oil from Russia. Therefore, India is being pressured to comply with such demand. However, India requires enough energy to supply the economy. This leaves India in a difficult position. The increase in trade tensions is being transferred to markets and oil prices.

U.S. Tariff Threats Escalate Tensions with India

The United States has put more trade pressure on India regarding its purchases of the Russian oil. This increases the possibility of more tariffs on New Delhi in case India fails to meet the demands of the United States. The dispute was serious as President Donald Trump threatened publicly to impose tariffs on Indian goods.

These remarks come after many months of talks following an earlier U.S. ruling to impose 50% import tariffs on Indian products. The US is likely to keep exerting direct pressure in regard to the further purchasing of Russian crude by India.

This uncertainty has induced pressure in the Indian market, where major stock indexes like Nifty IT have dropped with investors becoming concerned with the economic backlash.

On the other hand, Republican Senator Lindsey Graham sponsored a bill to impose up to 500% tariffs on any country that imports Russian oil. According to Graham, the closure of Russian oil imports can actually weaken the military forces of Moscow.

India Caught Between Energy Security and U.S. Pressure

These headwinds have put India in a tricky strategic grey area where it has to balance energy security with financial pressure. Indian refiners have decreased Russian oil imports after sanctions. However, they have not ceased purchasing, which exposes India to the U.S. threats of action.

The Indian exports already have high tariffs, about 50%, with 25% related to the purchase of Russian oil. The tariff rates would increase the losses of exports in case of the escalation of the dispute.

Global Oil Market Stability Amid Venezuela and OPEC+ Developments

The geopolitical turn of events in the world oil markets regardless of the US and India dynamics has complicated the future of crude prices.

The oil markets also adopted a cautious position concerning the US military actions on Venezuela. The market did not pay much attention to short-term disruptions and concentrated on the supply picture in the medium term.

Conversely, the state oil corporation PDVSA of Venezuela is also allegedly reducing production. This reduction is due to the decline in the overall storage capacity due to a US export embargo. Meanwhile, OPEC pillars reiterated that they had a policy of maintaining output at a constant level. These factors offer limited yet balanced situation of oil supply in the world.

WTI Crude Outlook: Bearish Trend Intensifies Below $75

Despite the Trump tariffs, Russian sanctions, Venezuela incident, and OPEC+ stability, the WTI crude oil prices are on a robust downward trend in 2026.

The chart below shows that the price has been settling down in the middle of the descending channel where the formation is bearish. Any drop below the $50 mark would cause a decline in the oil prices to $40 levels.

The overall trend continues to be bearish as long as the oil price remains below $75.