Crude Oil Soars Amid Weakening U.S. Dollar, U.S.-India Trade Deal
WTI Crude Oil for March delivery was last seen trading up by $1.10 (or 1.77%) at $63.24 per barrel.
Yesterday, U.S. President Donald Trump and India’s Prime Minister Narendra Modi announced a new trade deal.
On Truth Social, Trump stated that the U.S. would cut the main tariff on India from 25% to 18% and remove the “penalty tariff” he had imposed on India for buying Russian crude oil after India stops buying it altogether.
Trump also confirmed that through this deal, India has agreed to buy over $500 billion worth of U.S. products varying from energy, technology, agriculture, coal, etc.
For several weeks, reports have been indicating that India has reduced its purchases of Russian crude.
Experts view that various nations would soon arrive at an amiable deal with the U.S. and Trump would promote bilateral ties to rejuvenate U.S. business activity, which they feel would also kickoff brisk energy and oil demand.
On the flip side, the U.S.-India agreement has also triggered oversupply concerns in the oil market, with the possibilities of unsold Russian oil increasing worldwide.
The U.S. dollar index was last seen trading at 97.46, down by 0.17 points (or 0.17%) today.
Meanwhile, the geopolitical tension in the Middle East continues to simmer.
Trump threatened Iran to to negotiated a nuclear deal with the U.S. by sending a flotilla of U.S. naval forces near Iran.
Though Iran initially defied the threats, Iran’s President Masoud Pezeshkian later ordered his team to conduct negotiations with the U.S.
Despite the cooling in the escalation, which weighed down on oil prices yesterday, the risk premium returned today as experts view that Iran’s chances of striking a deal with the U.S. is slim.
On February 1, Ukraine’s President Volodymyr Zelenskyy stated that a new round of tripartite talks between the U.S., Russia, and Ukraine is scheduled for February 4 and 5 in the United Arab Emirates.
However, Russia continues bombarding Ukraine with drone and missile attacks, leaving thousands of Ukraine’s citizens helpless in extreme winter with no heating source to shield from the cold.
On February 1, the OPEC alliance consented to keep its oil output unchanged for March. This is a reaffirmation of the group’s agreement made in November 2025 wherein they froze further plans for increases from January 2026 through March 2026.
OPEC’s decision was interpreted as a confirmation of oversupply concerns in 2026 forecast by various agencies.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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