BARREL OF TROUBLE

Trump's tariffs on his major trading partners and India's 2025-26 Budget jeopardise the country's growing demand for fuel and put oil company finances under strain

- S DINAKAR

India's state-owned oil-marketing companies (OMCS) are staring down an abyss in 2025 on the heels of a disappointing annual budget for oil and gas for 2025-26 and from the volatility in oil and gas markets caused by the Trump administration's disruptive energy tariff policies. These developments come amid discounted Russian oil flows, a mainstay of gross refining margins for Indian refiners, slowing to a trickle in the face of the latest US sanctions and expensive alternative supplies.

US President Donald Trump initially threatened tariffs as high as 60 per cent on China and 25 per cent on Mexico and Canada, subsequently reducing rates to 10 per cent for Chinese imports and for energy imports from Canada and Mexico. The changes were effective from Tuesday but have been delayed by at least a month for its North American trading partners.

Trump's tariffs have roiled oil markets over concerns of potential near-term supply disruptions. After an initial spurt, gains on crude oil prices more than halved on the news that some tariffs might be delayed.

European benchmark Brent futures are now at $76 per barrel, after closing at around $82 per barrel on January 15, reflecting the volatility from Trump's policy announcements.

Trump on Tuesday ordered reinstating a "maximum pressure" campaign on Iran, which had last year illegally exported around 1.7 million barrels per day (bpd) of oil, primarily to China. In response to the news that Trump would sign the order, benchmark crude oil prices spiked nearly $2 per barrel, UK market intelligence provider Energy Intelligence reported.