Crude Oil Prices Dip as US Inventories Fall and India Faces Higher Tariffs

Crude oil prices dropped in Asian markets on Thursday after the U.S. reported a larger-than-expected drop in crude inventories. Investors also reacted to new U.S. tariffs on India, which began the day before.

As of 21:34 ET (01:34 GMT), Brent crude futures for October fell by 0.5% to $67.71 per barrel, while West Texas Intermediate (WTI) dropped 0.6% to $63.80 per barrel.

U.S. Crude Inventories Drop More Than 1.9 million Barrels

The U.S. Energy Information Administration (EIA) reported that crude oil inventories fell by 2.4 million barrels in the week ending August 22. This was more than the expectation of 1.9 million barrels.

Gasoline inventories also fell by 1.2 million barrels, while distillate stocks (like diesel and jet fuel) dropped by 1.8 million barrels.

There was also a noticeable rise in fuel demand. Gasoline usage increased to 9.24 million barrels per day, up from 8.84 million the previous week. This shows strong travel activity at the end of the summer season.

Fears of Decline in Seasonal Demand Impacting Crude Oil Prices

Although tighter oil supplies typically push prices up, the market reacted differently this time. Investors are concerned that once the summer travel season ends, fuel demand might drop. This could hurt refiners’ profits and reduce the need for more crude oil.

U.S. Imposes 50% Tariffs on India

On Wednesday, the U.S. increased tariffs on Indian imports to 50%, up from 25%. This move is part of U.S. efforts to pressure India over its continued purchase of Russian oil during the Ukraine war.

Although Indian refiners briefly slowed their purchases of Russian oil after earlier sanctions, they have now resumed buying. The market will closely watch how Indian buying behaviour changes under the new tariff rules.

Ukraine War and U.S. Policy Remain Key Factors

The ongoing war in Ukraine also continues to influence crude oil markets. Former U.S. President Donald Trump recently offered to act as a peace mediator. However, he warned of new sanctions on Russia if peace talks don't show progress soon.

Read more: Pidilite Special Interim Dividend Payment Date Tomorrow, Aug 29, 2025.

Conclusion

While U.S. oil supplies are shrinking, concerns over weaker future demand and rising geopolitical tensions are keeping prices under pressure. Traders are now focusing on India’s response to tariffs and ongoing developments in the Ukraine conflict to judge where crude oil prices might go next.

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