Oil prices drop sharply despite tensions between the US and India

OPEC+ production increases, world oil prices plummet amid US threats to sanction India

In the fourth trading session, world oil prices continued to fall as increased production from the OPEC+ group and concerns about global demand overshadowed the impact of political tensions between the US and India related to Russian oil.

Specifically, Brent oil price decreased by 1.12 USD (equivalent to 1.63%) to 67.64 USD/barrel. US WTI crude oil price also decreased by 1.13 USD (1.7%) to 65.16 USD/barrel. Both hit the bottom of the past 5 weeks.

This development comes after OPEC+ announced plans to increase production by 547,000 barrels per day in September, thereby ending the recent production cuts early.

In addition, US economic data also dampened market optimism. Service sector activity was almost unchanged in July, orders slowed and employment weakened, while input costs rose the most in nearly three years.

President Donald Trump continued to put pressure on India by announcing that he would impose higher tariffs within 24 hours if the country did not reduce oil imports from Russia. At the same time, he said that falling energy prices could force Russia to stop fighting in Ukraine. New Delhi reacted sharply, calling the warning "absurd" and pledging to protect its economic interests.

However, the oil market’s reaction suggests investors are not expecting much disruption to supply, with some experts saying oil prices will remain stable until more clarity from the US this week.

India is now the largest importer of seaborne crude oil from Russia, averaging around 1.75 million barrels per day in the first half of this year – up 1% from the same period last year.

Also last week, US crude inventories fell by 4.2 million barrels, according to data from the American Petroleum Institute (API). The US Energy Information Administration (EIA) is expected to release official figures on Wednesday.

Domestic gasoline prices

Domestic retail prices of gasoline on August 6, specifically as follows:

- E5RON92 gasoline: No higher than 19,401 VND/liter

- RON95-III gasoline: No higher than VND 19,840/liter

- Diesel 0.05S: Not higher than 19,068 VND/liter

- Kerosene: Not higher than 18,714 VND/liter

- Mazut oil 180CST 3.5S: Not higher than 15,533 VND/kg

The above domestic retail prices of gasoline and oil were adjusted by the Ministry of Industry and Trade and the Ministry of Finance from July 31. Accordingly, the price of E5RON92 gasoline increased by 122 VND/liter; RON95-III gasoline increased by 131 VND/liter; diesel oil decreased by 61 VND/liter, kerosene increased by 86 VND/liter, and fuel oil increased by 154 VND/kg.

In this operating period, the Ministry of Industry and Trade - Ministry of Finance did not set aside or use the Petroleum Price Stabilization Fund for E5RON92 gasoline, RON95 gasoline, diesel oil, kerosene, and fuel oil.

According to the joint ministries, the world oil market in this management period is affected by main factors such as: Information about the framework trade agreement between the US and the EU; increased US crude oil inventories; ongoing Russia-Ukraine military conflict... The above factors have caused world oil prices to fluctuate up and down depending on each product in recent days.