Trump Tariff Truce. The Energy Report 08/12/2025

There is increased expectations for demand ahead of today’s Energy Information Administration (EIA) Short Term Energy Outlook, which will likely revise its estimate for global demand upward and reduce its outlook for U.S. oil production. We also get the OPEC report this morning and they have been I believe one of the more accurate forecasts for US oil even though they’ve had to lower their more optimistic demand expectations over the last year.

This comes as President Trump is scheduled to meet with Vladimir Putin on August 15th in Alaska with President Trump trying to get a ceasefire with Ukraine. The Trump Administration is still holding on to the outside possibility that Ukrainian president Vladimir Zelinsky could also attend though Zelinsky seems to be unhappy with the suggestion that the ceasefire might include Ukraine giving up lands already controlled by Russia,

Yet the country that might be rooting for a ceasefire more than anybody could be India. Its global politics puts India behind the energy import 8 ball.

In global politics, this situation has put India in a challenging position regarding its energy imports. Signs indicate that India is already reducing its consumption of Russian barrels, as President Trump threatened secondary tariffs on the country. As reported last week, Indian refiners appear to have received the message. This development is putting additional pressure on Vladimir Putin, especially with President Trump’s historic meeting with him scheduled later this month in Moscow.

Bloomberg News reports that the differential — known as Brent-Dubai EFS, or exchange of futures for swaps — shows the European grade has a premium of just 60 cents a barrel, down from $3.90 in late-June, data from PVM Oil Associates show. That reflects expectations Indian refiners will take more Middle Eastern and medium-density grades as they pivot away from Russia’s Urals, traders said.

India Prime Minister Modi was talking tough about keeping Russia oil imports, but the reality is he can’t afford to get on the wrong side of President Trump and tariffs. They must reduce the buying of Russian oil, but when it comes to the cold, hard reality of trade, India’s options are shrinking fast. President Trump’s tariff threats are more than just bluster; they’re an economic squeeze play that New Delhi can’t ignore, especially when they’re staring down the barrel of an energy dependency that sees them importing a staggering 80% of their oil.

The truth is that Trump’s aggressive sanctions and tariff threats haven’t just pushed India to cut back on Russian crude—they’ve boxed India in by forcing them to walk away from other key suppliers like Iran and Venezuela. Remember, before the axe fell, India was snapping up as much as 480,000 barrels a day from Iran, according to Reuters. So, as the gears of global trade grind and the chessboard shifts, India finds itself with fewer moves and higher stakes. The market is watching, and so is the White House. You can bet India is hoping President Trump can strike a breakthrough with Vladimir Putin, but in the meantime, they’d better be scrambling to snap up every available cargo of U.S. crude they can get. The clock is ticking, the pressure’s on, and when the world’s energy chessboard shifts this fast, hesitation isn’t an option.

President Trump has increased diplomatic and economic pressure on Russia, to get them to stop the killing in Ukraine and India is caught in the crosshairs. President Trump isn’t just signaling—he’s swinging a sledgehammer straight at India and the message? Clear as day: keep that Russian crude flowing and you’ll pay a premium at the U.S. border.

President Trump for his tariffs on India is unapologetic as he said on truth social.  “India is not only buying massive amounts of Russian oil, but they are also then, for much of the oil purchased, selling it on the Open Market for big profits. They don’t care how many people in Ukraine are being killed by the Russian War Machine,” he wrote on social media.

Now, seasonality is impacting the crack spread—heating oil crack had a very good day as diesel inventories remain tight. There are still expectations that if President Trump can secure a ceasefire with Russia, some of our diesel inventories will look much better, as it raises the possibility of lifting sanctions on European diesel purchases. India will be very pleased; even though they’ll have to pay a higher price but at least they can buy the oil they need.

Natural gas prices are back below $3.00. As the concerns about winter storage have gone away for the short term, inventories have been building but we have to keep an eye on the weather. Fox Weather reported that, “Tropical Storm Erin formed in the central Atlantic Ocean on Monday morning and is forecast to become the first major hurricane of the 2025 Atlantic hurricane season after causing at least seven deaths in the Cabo Verde islands off the coast of Africa. The National Hurricane Center (NHC) said that maximum sustained winds within Tropical Storm Erin remained at 45 mph with some higher gusts.

There’s also another disturbance in the Gulf of America. This is something that could impact supply and demand on natural gas and we’re going to keep an eye on it. You need to download the Fox Weather app to keep up with the latest developments and stay tuned to the Fox Business Network because they are invested in you.
Breaking OPEC’s latest Monthly Report dropped like a stone in the energy pond this morning, and it’s got traders talking. The cartel is sticking to its guns, keeping the global oil demand growth forecast for 2025 unchanged at a healthy 1.29 million barrels per day. But here’s the kicker—OPEC just nudged up its 2026 demand growth outlook to 1.38 million barrels per day, up from the previous 1.28 million. That’s a sign they’re expecting the world’s appetite for crude to keep on growing, even as the energy transition chatter gets louder.

On the flip side, non-OPEC+ supply isn’t looking quite as robust. The forecast for 2026 was trimmed back to 630,000 barrels per day, compared to the earlier call for 730,000 barrels. That means the world could be counting on OPEC to pick up more of the slack.

And speaking of picking up the slack, OPEC’s own crude production surged last month—up by 263,000 barrels a day in July, landing at 27.54 million barrels daily, according to their trusted secondary sources. All eyes now turn to the next move from the alliance as the market digests these numbers. Stay tuned, because the energy story in 2025 and beyond is just getting started.

Make sure you call me – Phil Flynn – today to open your account at 888-264-5665 or e-mail me at pflynnpricegroup.com.