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Investing.com-- Oil prices held steady in Asian trading on Wednesday after sharp losses in the previous session, as traders weighed the impact of steep U.S. tariffs on India and weaker-than-expected declines in U.S. crude inventories.
As of 22:00 ET (02:00 GMT), Brent Oil Futures expiring in October inched down 0.1% to $67.16 per barrel, while West Texas Intermediate (WTI) crude futures also dipped 0.1% to $63.17 per barrel.
Both contracts declined more than 2% on Tuesday due to waning expectations of an imminent peace agreement between Russia and Ukraine.
Secondary India tariffs set to take effect
In a move tied to India’s aggression in buying Russian crude, the U.S. is imposing an additional 25% tariff on Indian imports, doubling the total duty to 50% starting August 27 at 12:01 a.m. ET.
This step is part of broader pressure aimed at curbing India’s ties with Russia amid the Ukraine war.
“The secondary tariff has not been enough to stop India from buying Russian oil. Initially, secondary tariffs saw Indian refiners pause purchases. They have resumed purchases,” ING analysts noted.
“The market will be watching Russian oil flows to India closely going forward to gauge the impact, if any, of secondary tariffs,” analysts added.
The conflict in Ukraine remains the main driver of market sentiment. U.S. President Donald Trump has sought to position himself as a mediator, but last week warned he would impose fresh sanctions on Moscow if no progress was made toward a peace deal within two weeks.
US crude stockpiles fall less than expected - API
Data from the American Petroleum Institute (API) on Tuesday showed U.S. crude inventories fell by 970,000 barrels in the week to Aug. 22, smaller than the 1.7 million barrel draw analysts had forecast.
Gasoline and distillate stocks decreased by 2.1 million barrels and 1.5 million barrels, respectively.
“The draw in distillate stocks was slightly supportive for the middle distillate market, particularly given that we are in a period where stocks usually grow,” ING analysts said.
Market participants now await official U.S. government inventory data from the Energy Information Administration (EIA) later on Wednesday for confirmation of the demand picture.