Oil Retreats From Three-Week High as Tariff Fight, Fed Turmoil Rattle Market

Oil prices swung sharply over the past two sessions, ending a four-day rally after touching their highest levels in almost three weeks. On Monday Brent crude briefly climbed 1.7% to $68.89 a barrel and West Texas Intermediate rose 1.95% to $64.90, buoyed by expectations of a September U.S. Federal Reserve rate cut and fresh Ukrainian drone attacks on Russian energy infrastructure. The mood changed on Tuesday. Brent slipped 2.3% to $67.22 while WTI fell 2.4% to $63.00 as investors reassessed geopolitical and policy risks. Market sentiment was jolted by President Donald Trump’s move to seek the ouster of Federal Reserve Governor Lisa Cook, a step viewed as injecting new uncertainty into U.S. monetary policy. Prices also came under pressure from Washington’s decision to impose an additional 25% levy on Indian imports from Wednesday, taking the total tariff rate to 50% in response to New Delhi’s continued purchases of discounted Russian crude. While India’s state refiners have resumed bookings for September and October cargoes, analysts are divided on whether the higher duties will materially curb flows. Supply risks have not disappeared. Kyiv’s strikes ignited fires at Russia’s export-linked Ust-Luga fuel terminal and at the 100,000-barrel-per-day Novoshakhtinsk refinery, prompting Moscow to raise its August crude export plan by about 200,000 barrels a day. Traders are now weighing those disruptions against OPEC+ plans to ratify additional production increases at a ministerial meeting on Sept. 7.