Crude Oil: Supply-Side Pressures, Tariff Risks May Trigger Break Below Key Support

Published 07/08/2025, 09:14
Updated 07/08/2025, 09:14

This year, several factors are shaping oil prices across different grades. Along with the usual indicators like production levels, inventory data, and global demand, the ongoing trade war has emerged as a key variable. Despite some agreements being signed, tensions remain high and could escalate further.

India is currently in focus. The US, under Donald Trump, has imposed 50% secondary tariffs in response to India’s continued imports of Russian oil. India has made it clear it will not stop buying Russian oil, leading markets to assume the current situation will hold for now. However, pressure on the Indian government may continue to build.

On the supply side, OPEC+ has ramped up production. This increase could put downward pressure on prices, potentially pushing WTI crude below $60 per barrel again.

Customs Tariffs and OPEC+ Moves Shape Oil Market Sentiment

India, alongside Brazil and China, ranks among the largest buyers of Russian oil. But it is now drawing heightened attention from Washington. Since 2022, India’s crude imports from Russia have surged, reaching as high as 40% of total oil imports—roughly 2.15 million barrels per day, out of a national consumption of 5.5 million barrels. That makes Moscow Delhi’s top oil supplier by a wide margin.

If US pressure succeeds in pushing India to scale back purchases, Delhi could turn to other OPEC+ nations, which recently announced a fresh supply increase of 547,000 barrels per day. That would deliver a two-pronged hit to supply expectations—potentially pushing oil prices below the $60-per-barrel mark again.

Markets will also be watching closely for any similar pressure on China and Brazil, Moscow’s other major customers.

Drawdown in US Inventories Fails to Lift Bulls

US oil inventories came in below forecasts, but prices kept sliding. The market seems more focused on demand concerns than supply signals.

US Crude Oil

The US remains the world’s largest oil producer, with room to ramp up output if needed. In Q2 2025, ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) raised production to 4.63 million and 3.40 million barrels per day, respectively. One soft data point is unlikely to shift the broader picture.

WTI Oil Approaches Major Support Zone

WTI crude has resumed its downward trend, testing key support near $64. A sustained break below this level could clear the path toward the next major threshold at $60, reinforcing the broader bearish momentum in oil markets.

WTI Crude Oil

If pro-supply pressures persist and WTI dips below $60, sellers may aim for the next key support near $55. On the upside, $70 remains the key resistance zone and the primary line of defense against further downside.

****

Be sure to check out all the market-beating features InvestingPro offers.

InvestingPro members can unlock a powerful suite of tools designed to support smarter, faster investing decisions, like the following:

  • ProPicks AI

Built on 25+ years of financial data, ProPicks AI uses a machine-learning model to spot high-potential stocks using every industry-recognized metric known to the big funds and professional investors. Updated monthly, each pick includes a clear rationale.

  • Fair Value Score

The InvestingPro Fair Value model gives you a clear, data-backed answer. By combining insights from up to 15 industry-recognized valuation models, it delivers a professional-grade estimate of what any stock is truly worth.

  • WarrenAI

WarrenAI is our generative AI trained specifically for the financial markets. As a Pro user, you get 500 prompts each month. Free users get 10 prompts.

  • Financial Health Score

The Financial Health Score is a single, data-driven number that reflects a company’s overall financial strength.

  • Market’s Top Stock Screener

The advanced stock screener features 167 customized metrics to find precisely what you’re looking for, plus pre-defined screens like Dividend Champions and Blue-Chip Bargains.

Each of these tools is designed to save you time and improve your investing edge.

Not a Pro member yet? Check out our plans here or by clicking on the banner below. InvestingPro is currently available at up to 50% off amid the limited-time summer sale.

Summer Sale

Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.