Escalating US-Russia tensions pose a threat to global crude oil prices, prompting experts to forecast a potential surge to $80 per barrel.
The global oil market is facing an uncertain future as U.S. President Donald Trump has given Russia a deadline of 10-12 days to end the war in Ukraine. The potential consequences of Russia's failure to comply could lead to additional sanctions and secondary tariffs of 100% on countries trading with Russia, which may push oil prices higher.
Russia accounts for approximately 10% of global oil production, with key importers such as China, India, and parts of Eastern Europe heavily reliant on Russian oil. If these countries were to stop buying Russian oil to avoid tariffs, global supply would tighten, potentially driving oil prices sharply higher due to the difficulty of quickly replacing Russia's substantial output.
The tariffs, which could reach up to 500% on imports from countries trading with Russia, aim to economically isolate Russia amid the Ukraine conflict. However, these measures carry substantial risks of collateral damage, as major importers could accelerate deals with Middle Eastern, African, and Latin American producers, and there could be shifts toward alternative trade mechanisms, such as China boosting yuan-based oil transactions to circumvent dollar-based sanctions.
Switching suppliers is complex and cannot instantly fill the shortfall, likely causing short- to medium-term price spikes and volatility. Furthermore, the global oil market balance is already tight, with production and consumption roughly equal, so removing a key supplier like Russia without proportionate increases elsewhere could fuel inflation worldwide and exacerbate geopolitical tensions related to energy security.
Even if Saudi Arabia and select OPEC countries step in to fill the supply gap, it will take time, adding to short-term price pressure. The U.S.-EU trade deal has provided some support to the market, but geopolitical tensions persist and continue to add upside risks. The extended U.S.-China trade truce has supported market sentiment, but risks remain elevated in the oil sector.
In addition to geopolitical tensions, experts predict that Brent crude oil prices will rise to $80 per barrel in the coming months, with a short-term target of $76 for October 2025 and a year-end target of USD 80-82. For WTI Crude Oil (September 2025), experts expect a short-term target of $73 from the current level of $69.65, with a year-end target of USD 76-79 and a downside support at $65.
If Russian oil stops flowing into Indian refineries, global oil prices would likely rise, but there would be no oil shortage in India due to imports from 40 different countries. Balancing the price for consumers would be a challenge if Russian oil is not available. Geopolitical risks, particularly tensions between the United States and Russia, may increase upward pressure on oil prices.
As the situation unfolds, the global oil market will closely watch US inventory levels and the upcoming interest rate decision, with a stronger U.S. dollar keeping some pressure on oil prices. Meanwhile, experts such as Narendra Taneja predict that if Russian oil is forced out of global supply chains, crude oil prices could rise significantly, potentially reaching $100 to 120 per barrel.
- The potential consequences of Russia's failure to comply with the deadline given by U.S. President Trump could lead to increased oil prices due to tightening global oil supply, as Russia accounts for approximately 10% of global oil production.
- Major importers, such as China, India, and parts of Eastern Europe, could face higher oil prices if they were to stop buying Russian oil to avoid tariffs, as it may be complex and time-consuming to switch suppliers.
- Shifts towards alternative trade mechanisms, such as China boosting yuan-based oil transactions to circumvent dollar-based sanctions, could potentially mitigate the impact of tariffs on the global oil market but also carry risks of economic and geopolitical instability.
- If Russia is economically isolated, due to increased tariffs and sanctions, investment in the global oil market may become more volatile, as major importers could accelerate deals with other producers like those in the Middle East, Africa, and Latin America.
- Experts predict that Brent crude oil prices will rise to $80 per barrel in the coming months, with concerns about geopolitical tensions, particularly between the United States and Russia, continuing to add upside risks to the oil market.
