This production decision directly challenges recent support levels, particularly as WTI now sits precariously above its 200-day moving average of $64.08. A break below this could open downside toward $62.69.
Geopolitical Risk Discounted by Market
Concerns over a supply shock from India’s Russian oil imports eased after markets shrugged off U.S. President Donald Trump’s renewed tariff threats. Trump warned of higher tariffs on Indian goods over its continued purchases of Russian seaborne crude, which average 1.75 million bpd year-to-date. However, traders appear unconvinced that Washington will escalate trade actions enough to disrupt oil flows.
India’s government dismissed the threats as “unjustified” and emphasized its commitment to economic self-interest. For now, the market appears to have discounted the likelihood of real supply disruptions stemming from this diplomatic standoff.
Demand Risks From U.S. and China Cloud Outlook
JPMorgan flagged heightened risks of a U.S. recession, adding to global demand concerns. Simultaneously, China’s Politburo meeting revealed a shift in economic focus away from stimulus and toward structural rebalancing. Traders remain cautious, with limited expectations for a near-term consumption boost from the world’s second-largest economy.
This combination of sluggish demand signals from both major economies has softened bullish conviction across the energy complex.
