Oil Rises 1% Amid Trump’s Russia Deadline and Tariff Threats, Market Eyes India’s Compliance

Oil prices rose over 1% on Wednesday, with Brent crude (September) closing at $73.24 and WTI at $70, driven by investor focus on President Trump’s accelerated 10–12 day deadline for Russia to end the war in Ukraine or face secondary tariffs. Trump also announced a 25% tariff on Indian goods starting August 1 and warned China of severe penalties for buying Russian oil. Analysts noted that India’s potential compliance could impact 2.3 million bpd of Russian oil exports, contributing to bullish sentiment in the oil market. Meanwhile, U.S. crude inventories surprisingly rose by 7.7 million barrels, but gasoline stocks fell by 2.7 million barrels, more than expected. Despite stronger-than-expected U.S. economic growth in Q2, the Federal Reserve kept interest rates steady and gave no clear signal on a possible rate cut in September.

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Trump Slaps India With 25% Tariff and Russia Trade Penalty

Donald Trump announced a 25% tariff on Indian imports along with an additional “penalty” targeting India’s extensive trade with Russia, especially its large energy purchases. The tariffs take effect immediately, reflecting stalled negotiations and growing U.S. frustration over Moscow’s actions in Ukraine. Trump criticized India’s high trade barriers and its military and energy ties to Russia, framing the measures as part of broader pressure on Moscow. The move introduces secondary tariffs aimed at countries trading with Russia, a new and untested U.S. trade tool. Analysts note that shifting trade flows and geopolitical uncertainty are creating volatility that could benefit tanker shipping markets.

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U.S. Imposes Sweeping Sanctions on Iranian Shipping Network

The U.S. Treasury announced major new sanctions on over 115 Iran-linked individuals, entities, and vessels, targeting a vast shipping network controlled by Mohammad Hossein Shamkhani, son of key regime adviser Ali Shamkhani. This marks the most significant Iran-related sanctions since 2018, aiming to disrupt Iran's and Russia’s oil trade through a web of intermediaries in 17 countries including Panama, Italy, and Hong Kong. U.S. officials estimate Iran’s oil exports have dropped from 1.8 million to 1.2 million barrels per day, with expectations of further declines. The sanctions are part of President Trump’s renewed "maximum pressure" campaign following June airstrikes on Iranian nuclear facilities, which he claims “obliterated” Iran’s bomb-making capability. Despite the sanctions and military action, diplomatic prospects remain dim, with Iran unwilling to re-engage after five rounds of stalled talks.

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Brazil Halts Oil Shipments to U.S. Amid Uncertainty Over Trump’s 50% Tariff Plan

Brazilian oil exports to the U.S. have been suspended due to uncertainty surrounding President Trump’s planned 50% tariff on Brazilian goods, according to IBP president Roberto Ardenghy. Although oil was exempt from the previous 10% April tariff, it is unclear whether the exemption will remain under the new tariff taking effect August 1. As a result, companies like Petrobras, Shell, ExxonMobil, and TotalEnergies are storing oil on ships rather than exporting it. Brazil exported 1.78 million bpd in 2024, with 243,000 bpd going to the U.S., and Petrobras said 8% of its Q2 exports went to the U.S. If no exemption is granted, Brazil may divert exports to Europe, India, or Asia-Pacific markets.

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Trans Mountain Plans Pipeline Capacity Boost, May Add Up to 300,000 bpd by 2029

Canada’s Trans Mountain pipeline operator may launch an open season this year to assess interest in increasing capacity by using drag-reducing chemicals, potentially boosting flow by 5%–10% at a cost of C$10–20 million. CEO Mark Maki said further projects could follow, including new pump stations and 20–40 km of wider pipe, with a 2026 open season and a 2029 in-service date. The current pipeline, expanded to 890,000 bpd last year at a cost of C$34 billion, is already 84% full and could reach capacity by 2027–2028 due to growing oil sands output. If all enhancement projects proceed, Canada’s export capacity could rise by 200,000–300,000 bpd. With 80% of Canada's 4.2 million bpd in 2024 exported—mainly to the U.S.—Trans Mountain is key to diversifying shipments to Asia amid trade tensions.

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Chinese Refiner Yulong Makes First Canadian TMX Crude Oil Purchases

Shandong Yulong Petrochemical has bought its first Canadian crude oil cargoes exported via the Trans Mountain pipeline (TMX) for September and October deliveries, signaling supply diversification. The purchases include Access Western Blend (AWB) crude, acquired at about $1.50 per barrel discount to ICE Brent benchmarks, with each cargo around 550,000 barrels. These are Yulong’s initial Canadian oil buys since it began processing 200,000 bpd last September. AWB is a heavy, acidic diluted bitumen produced by Canadian Natural Resources and MEG Energy. The refiner also recently purchased Russia’s Urals crude and normally sources Russian Far East ESPO and West African grades.

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Yulong Plans $16 Billion Petrochemicals Expansion

Shandong Yulong Petrochemical, a relatively new private refining complex in China, intends to invest nearly 118 billion yuan ($16.4 billion) to build a large-scale petrochemicals plant. The project is expected to take around four years to complete, create over 7,000 jobs, and generate annual profits of approximately 13.5 billion yuan. This expansion comes amid Beijing’s efforts to reduce industrial overcapacity and improve profitability by curbing excessive competition in sectors including refining. Yulong’s 400,000-bpd refinery started operations last year, benefiting from growing domestic demand for plastics. The planned facility aims to produce millions of tons annually of key chemical products such as purified terephthalic acid, high-carbon olefins, and polyolefin elastomers, which are essential for plastics manufacturing.

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China Maintains Demand for Russian ESPO Oil Despite U.S. Tariff Deadline

Premiums for Russia’s ESPO Blend crude bound for China in late August to early September have remained steady at $2–$2.20 per barrel over Brent, despite a U.S. threat to impose 100% secondary tariffs if Russia fails to progress on Ukraine peace by August 7–9. Chinese independent refiners in Shandong and state oil majors have increased crude processing as refining margins improve, sustaining demand. Unipec, the trading arm of Sinopec, reportedly purchased 7–8 ESPO cargoes for August loading, reflecting strong interest. Tightened supply from Russia's Sokol crude due to field maintenance has further boosted ESPO prices. Traders say ESPO remains the most cost-effective option for Chinese refiners as Middle East crude prices rise.

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EU Sanctions Leave Nayara Energy’s Fuel Shipments Stranded at Sea

Three Panamax-sized tankers carrying fuel from India’s Nayara Energy remain undelivered due to new EU sanctions imposed on July 18 over Nayara’s Russian ownership ties, including Rosneft. The Alora, loaded with 472,800 barrels of jet fuel, has been anchored off Portugal since July 18, unable to discharge despite payment, due to reluctance from EU-affiliated service providers. A second ship, Em Zenith, carrying 40,000 tons of diesel, reversed course from Malaysia and is now anchored in the Straits of Malacca. A third tanker, Pacific Martina, chartered by Shell, is floating off the Gulf of Oman with 60,000 tons of jet fuel, still seeking a buyer. Nayara has reduced refinery output due to storage constraints and canceled loadings.

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Glencore JV Expands in Africa’s Largest Oil Storage Facility Amid Market Oversupply Concerns

Glencore’s joint venture Aquarius Energy has completed the purchase of a 37% stake in MOGS Saldanha OTMS, Africa’s biggest oil storage site with a 10 million barrel capacity. The acquisition comes as oil traders prepare for an anticipated market oversupply, using storage to capitalize on future price gains. This move reflects Glencore’s growing focus on energy trading assets, highlighted by its recent partnerships and increased profit forecasts for its trading division.

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Trump Announces 15% Tariff Deal with South Korea

President Donald Trump revealed a trade agreement with South Korea that includes a 15% tariff on South Korean exports to the US, helping Seoul avoid a previously threatened 25% tariff set for August 1. The deal also includes a $350 billion investment fund pledged by South Korea, managed directly by Trump, similar to Japan’s earlier commitment to reduce tariffs. Additionally, South Korea agreed to increase purchases of US products such as cars, trucks, and LNG energy supplies.