Morning Highlights: Oil Slips Again as OPEC+ Supply Rises, Trump Targets India Over Russian Crude

Tuesday, August 5, 2025

Oil prices extended losses Tuesday as markets digested the impact of rising OPEC+ production and escalating geopolitical risk, with U.S. President Donald Trump issuing fresh tariff threats to India over its Russian oil imports.

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Market Snapshot (as of 06:05 EST):

• Brent (Oct): $68.03 (▼$0.73, -0.5%)

• WTI (Sep): $65.48 (▼$0.81, -1.2%)

Both benchmarks settled more than 1% lower Monday, touching their lowest levels in a week.

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OPEC+ Lifts Output, Pressure Builds

OPEC+ confirmed Sunday it will raise output by 547,000 barrels/day in September, accelerating the rollback of its 2022 production cuts. That decision added pressure to prices already wobbling under signs of slower global demand.

“I'd call it a stable market for oil. Prices are likely to hold in a tight range until more clarity emerges from Washington,”

— Giovanni Staunovo, UBS

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Trump Targets India Over Russian Crude

President Trump renewed pressure Monday on India, threatening to slap higher tariffs on Indian goods over its continued imports of Russian oil.

• India imports ~1.75 million bpd of Russian crude—up 1% YoY, per trade data.

• New Delhi called the remarks “unjustified”, promising to defend its energy security and trade interests.

• Analysts say markets are skeptical of immediate disruption, noting past inconsistencies in Trump’s enforcement tactics.

“Would Trump really risk pushing oil prices higher with an election looming? That’s the real question,”

— John Evans, PVM

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Demand Concerns Resurface

Macroeconomic signals are darkening:

• JPMorgan raised its U.S. recession risk outlook on Tuesday.

• China’s Politburo meeting signaled no more broad policy easing, shifting focus to long-term economic rebalancing.

• U.S. rig counts are falling, stoking fears of a potential production plateau.

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U.S. Rig Decline Signals Output Risk

Despite current record production levels, U.S. onshore output is showing signs of peaking:

• Rig count now at 540, down sharply from over 1,000 in 2019.

• Wood Mackenzie sees Lower 48 output falling 200,000 bpd in 2026, another 130,000 bpd in 2027.

• Permian Basin, the U.S.’s largest field, has lost 24 rigs since May, with the total now at 259, the lowest since Sept. 2021.

“Drillers already upgraded to the best rigs available. There’s no more ‘efficiency boost’ left to extract,”

— Paul Mosvold, COO, Scandrill

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Looking Ahead

• Trump is expected to clarify his Russia and India sanctions policy later this week.

• U.S. EIA inventory data due Wednesday could provide short-term direction.

• Attention is also on Permian rig activity, a bellwether for near-term U.S. production.