International News 28 August 2025
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Crude Oil Prices Slide 2% on Geopolitical and Trade Tensions
Crude oil benchmarks fell sharply on Tuesday (Aug 27), erasing the prior session’s gains as markets weighed escalating trade and geopolitical risks. Brent crude for October 2025 delivery dropped $1.58, or 2.3%, to close at $67.22 per barrel, while West Texas Intermediate (WTI) slid $1.55, or 2.4%, to $63.25. Analysts highlighted investor caution amid the ongoing Ukraine conflict, U.S. tariff threats, and potential disruptions to Russian fuel supplies. “Given the level of uncertainty, investors will remain reluctant to commit to a long-term direction,” said Tamas Varga of PVM Oil Associates, who expects Brent to trade in a $65–$74 range in the near term. Monday’s brief rally was fueled by supply risks after Ukrainian drone strikes hit Russian energy facilities, disrupting refining operations and tightening domestic fuel supply. In response, Russia revised down its crude export plans from western ports by 200,000 bpd in August. Meanwhile, U.S. President Donald Trump renewed threats of further sanctions on Russia if no progress is made toward a peace deal within two weeks, though reports suggest Washington and Moscow have quietly discussed energy arrangements during negotiations. Adding to uncertainty, U.S. tariffs on Indian exports may rise as high as 50%, one of the steepest levies ever imposed, further straining global trade flows and complicating Russia’s already pressured oil exports.
U.S. Slaps 25% Additional Tariffs on Indian Goods, Exporters Face Major Setback
The U.S. Department of Homeland Security announced a new 25% tariff on all Indian goods starting Wednesday, effectively raising total duties on Indian exports to nearly 50%. The move follows President Donald Trump’s decision to punish India for sharply increasing imports of Russian oil, which Washington claims indirectly funds Moscow’s war in Ukraine. The immediate market impact saw the Indian rupee weaken to 87.75 per dollar and benchmark equity indices NSEI and BSESN fall around 0.7%. With Russian crude now making up 42% of India’s imports—up from less than 1% pre-war—the U.S. argues India is profiting from discounted Russian oil. Exporters warn that nearly 55% of India’s $87 billion annual shipments to the U.S. could be hit, with industries such as engineering goods and diamonds facing sharp order cancellations. Trade groups predict a 20–30% export drop as buyers shift to competitors like Vietnam, Bangladesh, and China. The Indian government is preparing financial aid and encouraging market diversification, but analysts caution the tariffs could shave up to 0.8 percentage points off GDP growth this year and next. While New Delhi views the U.S. action as disproportionate compared to China and Europe’s Russian oil purchases, Prime Minister Modi insists India will not compromise its economic interests, signaling a potential escalation in trade and diplomatic tensions.
US Yield Curve Steepens Amid Fed Independence Concerns
The US Treasury yield curve steepened on Tuesday (Aug 26) following President Donald Trump’s move to fire Federal Reserve Governor Lisa Cook over alleged mortgage loan violations. Cook rejected the claim, insisting Trump has no authority to dismiss her and refused to resign. The development heightened market concerns about Fed independence, pushing long-term yields higher while short-term yields slipped. The 2-year yield, sensitive to rate expectations, fell 2.4 bps to 3.706%, while the 10-year benchmark rose 1.2 bps to 4.287%, widening the spread to nearly 60 bps—its steepest since mid-July. Analysts warned that political interference could undermine Fed credibility, stoke inflation fears, and weaken foreign demand for US Treasuries. The move comes as markets increasingly expect the Fed to cut rates at its September 16–17 meeting, reinforced by Chair Jerome Powell’s dovish remarks last week. Economists, including CreditSights’ Zachary Griffiths, noted weaker labor market conditions compared to September 2024, when the Fed delivered a 50 bps cut, suggesting room for multiple rate reductions this year. Meanwhile, the US Treasury is set to auction $183 billion in bonds this week, including $69 billion in 2-year notes, $70 billion in 5-year, and $44 billion in 7-year maturities. Trump has long criticized Powell for being too slow in easing policy and is expected to appoint a more dovish successor once Powell’s chair term ends in May, though Powell may remain as a Fed governor.