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00:00You know, the reason Trump has imposed these extra tariffs on India is because allegedly he's unhappy that India continues to buy Russian oil. Do you expect India to modify their behavior or should, you know, these tariffs become so punitive that they start to have quite a negative impact on the Indian economy? Good morning, Jomana. So as things stand today and as you were mentioning earlier, the 25% additional tariffs against India have just gone into effect. So effectively, 50% tariffs against India. As things stand now, the Indian government has not given any director whatsoever to the countries refiners whether they should pare back or stop buying more Russian oil or whatever. Its been left to the refiners as individual decisions. Now, just to put some color around that. Indian refiners are always on the lookout to diversify the sources of crude. It's an ongoing strategy and they have been doing that in recent days, perhaps with a little bit more fervor. But as of now, it doesn't look to me that India is going to change course. And in terms of New Delhi's director, certainly I don't expect any change of course, and I certainly don't, as a result, expect the refiners to make any major pivots against Russian crude purchases. So yesterday, President Trump was asked about whether there could be financial penalties, penalties or sanctions on Russia should Russia not go down the path of peace. And I think this is one of the major drivers for the oil market. What likelihoods would you place? What probability would you place on this actually going into effect? And Russian oil supplies becoming a lot more difficult to procure in the coming months? As of now, Jomana, the market doesn't seem to be pricing in that worst case scenario of major sanctions, secondary tariffs against other buyers of Russian oil, leading to a major disruption in Russian flows. And we're talking about 6 to 6 and a half million barrels of crude and refined products that go out from this country. So that that is not the market's best case scenario right now. The problem here, Jomana, is that it is obviously a very complex topic. You know, if you sort of zoom out all the way to the impasse over Western security guarantees to Ukraine and, you know, Russian and Ukrainian red lines and so on. If you drill down a little bit as well to try and connect it to the oil markets, it's really very poor leverage. Look, and looking at, you know, if even if India were to stop buying Russian crude, you know, China is going to need to buy. China is a much bigger buyer. So, you know, what exactly is Trump trying to achieve? I think that's very, very unclear right now. The whole range of outcomes from this to perhaps, you know, he extends the two week deadline he's given to Trump and to Putin and Zelensky all the way to, as you say, he takes the course of stricter sanctions and everything in between is right now open. So I think it's a very thick fog, all the possibilities for the market and very hard to pick one of those outcomes right now. Yeah, and what's interesting, if you look at what's the price of Brent say in the last month, it's actually been pretty stable. We've sort of been in the $3 range between 6669. If you if you go back and of course before that you had the Iran Israel war. But 66, 69 is where we are relatively stable. What do you think are going to be the biggest drivers in the coming months? Looking out to the last quarter of the year, look, to my mind, Ukraine remains very much center stage. There is a slim possibility that Trump walks away from this whole issue as a result of which we just have a prolonged stalemate. I think the chances of that are very slim. So assuming that, you know, he just continues to extend the time and but at the same time put some mild pressure on both the leaders in Moscow and Kiev, assuming that that happens, I think crude will continue to remain rangebound. There aren't that many other factors to move it out of this range. I think Opec+ for the time being is pretty much done with its, you know, major decisions all in the rearview mirror. Now with regard to the 2.2 million barrels per day of cuts that it has very quickly unwound. There is the underlying global economic outlook, of course, and then I see the oil market quite decoupled from the day to day swings in sentiment that we have, seeing in other risk assets, for instance, in the US equity markets. But the assumption there is that it's going to be a sluggish economic growth, lots of economic headwinds as a result of this trade wars and as a result of which, yeah, bit global oil demand growth as well. Let me just round up with a question, because for as long as, you know, all of this year when OPEC started putting this extra barrels back to the market, everyone anticipated for there to be a supply glut by the end of this year. Do you see signs of that happening now? So there are some gloom and doom scenarios out there, projections of 2 to 3 million barrels per day of supply, oversupply in the markets and fourth quarter first quarter of next year. I do not subscribe to that, Jomana. I think probably there might be a bit of a surplus close to a million barrels per day Q1. Again, that is a slow demand season. You know, stock build is to be expected So far from what we can see, the 2.2 million barrels. But even if all of that is not quite yet in the market, it will be that will happen next month. The market has taken it in its stride. Prices have remained have not spiraled down towards into the fifties. The market remains in backwardation. The backwardation has come off a little bit, but still very much the fallout goes out in backwardation.

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Hari: Tariffs Won’t Stop India from Buying Russian Oil

Additional US tariffs on Indian goods have come into effect on August 27, doubling the existing 25% duty imposed on August 7 to 50%. Meanwhile oil held a large drop as investors weighed the fallout from higher tariffs over India’s imports of Russian crude. Vandana Hari, Founder of VANDA Insights told Bloomberg’s Horizons Middle East and Africa anchor Joumanna Bercetche there’s no signs the tariffs will have a major shift in local refiners’ purchasing patterns. (Source: Bloomberg)

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