WASHINGTON (dpa-AFX) - Crude oil prices fell on Tuesday amid the US intensifying pressure on India to stop buying oil from Russia as well as OPEC+'s recent decision to boost production.
Today, the WTI Crude Oil for September delivery has slumped by $1.05 (or 1.58%) to $65.24 per barrel.
On Sunday, OPEC+ member-nations agreed to raise oil production by 547,000 barrels per day for September.
This hike following the earlier increases of 548,000 bpd in August, 411,000 bpd in May, June, and July, and 138,000 bpd in April, which started the process of reversing their voluntary production cuts.
The next OPEC meeting is on September 7, when it is expected to announce another production hike.
OPEC has based its decision on its estimates that demand for oil will increase by 1.2 mbd in 2025 and 1.3 mbd in 2026.
Traders feel that the claims of the OPEC+ alliance are questionable.
For instance, Asia is the largest oil-importing region globally where demand in the recent months has been weak.
China has been buying more oil, likely due to lower prices and the country has been apparently building its oil reserves quickly.
Aramco of Saudi Arabia, the world's top crude oil exporter, reported today around a 20% decline in second quarter earnings as lower oil prices weighed on revenues.
On the geopolitical front, with the intent to bring the three-year-plus old Russia-Ukraine war to an end, US President Donald Trump recently served an ultimatum to Russia to agree to a ceasefire (which ends this Friday) or face heavy sanctions. In addition, he threatened to impose 'secondary sanctions' on countries buying oil from Russia, affecting majorly India and China.
On top of the already-imposed tariff rate of 25% on India, Trump threatened today that he would raise the levies in the next 24 hours if the country continues to purchase Russian oil.
In response, India has called Trump's threats 'unjustified.'
A streamlined tariff regime accelerates global economy and thereby the demand for oil and energy.
Despite expectations that the US Fed will cut interest rates, which could boost global trade and thereby accelerate oil and energy demand, crude oil has struggled to hold on to its position due to Trump's inconsistent tariff policies towards key US trade partners.
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