Oil Prices Stabilize Around $64 Amid Kurdistan Export Resumption and U.S.–India Tariff Tensions
With Iraq poised to send 80,000 bpd of Kurdish crude through Turkey’s Ceyhan pipeline and U.S. President Trump preparing 50% levies on Indian imports over Russian oil, Brent and WTI face a tug-of-war between renewed supply flows and geopolitical risk | That's TradingNEWS
Overview of Crude Market Dynamics as WTI Clings to Key Support
Crude futures are trading near $64 per barrel for West Texas Intermediate (CL=F), reflecting a balance between renewed supply flows and intensifying geopolitical friction. The modest draw of 1.69 percent on Wednesday masks deep underlying currents as Iraq prepares to funnel 80,000 barrels per day of Kurdish output through the Ceyhan export route, while Washington’s looming threat of a 50 percent tariff on Indian imports tied to Russian purchases casts a long shadow over global oil demand.
Resumption of Kurdistan Exports via Ceyhan and Its Implications
Long dormant for over two years, Kurdish exports—averaging some 400,000 bpd before the shutdown—will re-enter the market in a calibrated fashion. The federal Iraqi Oil Minister’s announcement that an initial 80,000 bpd will pass through SOMO and the Turkish pipeline signals a tentative step toward normalizing supply from northern Iraq. Traders have already begun booking tankers in anticipation, and any delay—exacerbated by pipeline maintenance or renewed regional tensions—could tighten an already finely balanced market. Conversely, even a partial resumption dilutes the price support that had been buoyed by Kurdistan’s absence, keeping futures pinned below year-to-date highs.
Refinery Disruptions in Russia and Shifts in Export Strategy
On the Eurasian front, Ukrainian drone strikes that disabled capacity at major Rosneft refineries forced Russia to redirect up to 200,000 bpd of crude to its western terminals. Reports that shipments through Novorossiysk and Ust-Luga could jump to 2 million bpd in August underscore how refining bottlenecks translate directly into higher seaborne export volumes. The net effect has been a surge in Urals cargoes on the spot market, prompting a scramble for Aframax tonnage and exerting downward pressure on Brent (BZ=F) futures, which even after a modest pullback remain sensitive to Russia’s evolving export profile.
U.S. Tariff Threats and Their Broader Demand Consequences
In Washington, President Trump’s proposal of a 50 percent tariff on Indian imports in retaliation for continued Russian oil purchases has unsettled refiners in Asia’s fastest-growing market. India’s intake of discounted Urals crude—nearly 2.1 million bpd in June—has provided a crucial outlet for Russian barrels. A steep levy would likely force New Delhi to recalibrate its procurement strategy, potentially driving up spot prices and exacerbating inflationary pressures across Asia. Such a demand shock would reverberate through refining margins and could tighten global balances just as OPEC+ signals a gradual output increase.
Inventory Draws, Banking Constraints and Seasonal Demand Patterns
American Petroleum Institute data showing a sizeable crude draw underscores the reluctance of inventories to swell even as supplies re-enter the market. Yet Wall Street’s pullback from energy lending—down a quarter year-to-date—has constrained capital for new drilling, limiting US shale producers’ ability to respond to price swings. With US gasoline futures slipping to $2.08 per gallon and distillate markets likewise under pressure, the seasonal summer driving peak may deliver only muted upside. Traders remain vigilant for DOE stock reports, but the prudent view is that incremental demand gains will struggle to offset the confluence of fresh supply and financial headwinds.
Technical Landscape and Near-Term Outlook
Technically, WTI’s hold above $63 suggests fatigue among sellers, yet the inability to reclaim $66 signals persistent bearish undercurrents. Brent’s failure to clear $68.50 reinforces the stalled rally. A decisive break below the 50-day moving average would open the door to $61 support, while a surge above $66.80 could rekindle bullish momentum toward $70. In this contested environment, a neutral stance—favoring a hold rather than an outright buy or sell—reflects the market’s tug-of-war between incremental supply boosts and demand risks emanating from geopolitical brinkmanship.
