Insight Focus
Oil prices fall amid Russia-Ukraine-US sanction talks. US trade tensions with India, Brazil, and the EU are stalling, while tariffs and political frictions push China toward Brazilian soy. Meanwhile, China targets Canadian canola and EU dairy, while piracy in Asian waters surges.
Oil Prices Slide on Russia-Ukraine Talks
Oil prices fell on August 19 as markets weighed the possibility that ongoing talks between Russia, Ukraine, and the US could lead to a lifting of sanctions on Russian crude, potentially boosting global supply.
Brent crude slipped 1% to USD 65.98 per barrel, down about 9% since the start of August and nearly 19% below its January 2025 high. U.S. WTI for September delivery also fell 1% to USD 62.76 per barrel, down about 7% since the start of August and roughly 22% below its mid-January 2025 high, highlighting broader downward trends in the oil market.
The developments followed a White House meeting with Ukrainian President Zelenskiy and European leaders, during which President Trump confirmed he had spoken with Russian President Putin. Arrangements are reportedly being made for a trilateral summit. Analysts note that a softening of the US stance on secondary sanctions has eased some geopolitical concerns. Chinese refineries have booked 15 cargoes of Russian oil for October–November delivery, while Indian demand is reportedly declining.
However, experts caution that markets are unlikely to react dramatically unless a full ceasefire occurs and all US and EU sanctions are lifted — considered highly improbable. Russia’s oil and gas industry has already been reshaped by sanctions: European gas imports from Russia have fallen from 45% in 2021 to 18%, EU oil imports from 30% to 3%, while India, China, and Turkey increasingly absorb Russian crude, with India now accounting for 38% of Russian oil imports, up from 16% in 2021.
Source: European Commission
Exporters Face Uncertainty as US Trade Talks Falter
In the past two weeks, US trade negotiations with major partners have slowed, leaving exporters facing continued tariff exposure and unresolved market access issues.
Negotiations with India have been paused, with the August 25–29 round in New Delhi officially cancelled. India faces the highest US tariffs—50% in total—with half already in effect and the remainder starting August 27. Disputes over agriculture, dairy, and Russian oil imports have contributed to the stalemate, creating uncertainty for supply chains dependent on Indian goods.
US–Brazil trade relations are similarly strained. An August 13 meeting between Brazilian Finance Minister Fernando Haddad and US Treasury Secretary Scott Bessent, meant to address 50% tariffs on Brazilian exports, was abruptly cancelled amid allegations of political interference, though the US has not confirmed these claims. The tariffs cover products such as coffee, cocoa and sugar but exclude roughly 45% of Brazilian exports, including crude oil and fertilizers.
In addition, progress on a US–EU trade agreement has also stalled. The European Commission returned a draft joint statement on trade and tariffs to the US for further review. While a framework deal was reached in late July, only a basic 15% tariff has been applied, and the EU is still awaiting clarification from the White House on industry-specific carve-outs, including for the automotive sector.
Separately, India’s strained trade ties with the US are occurring against a backdrop of warming relations with China. Recent high-level talks, including a visit by Chinese Foreign Minister Wang Yi, signal efforts to reduce border tensions and expand bilateral trade. Analysts suggest that US tariff pressures may be nudging India toward closer engagement with China and other partners, highlighting the geopolitical as well as economic implications of stalled US trade negotiations.
US Loses China Soy Market to Brazil
US trade tensions are also impacting the soybean market, as ongoing disputes and tariffs are shaping export patterns and limiting US access to key buyers. Reuters reports that China is turning to Brazil for the September–October window.
Chinese crushers have already booked about 8 million tonnes from South America for September and another 4 million tonnes for October—together nearly 12 million tonnes—compared with roughly 7 million tonnes sourced from the US over the same period last year. Even with US soybeans priced roughly USD 40/tonne below Brazilian offers for October, tariffs of 23% and political frictions have kept Chinese demand muted, disrupting the usual seasonal pattern.
Heavy front-loaded buying has allowed China to build inventories, reducing exposure to potential Q4 risks. This shift has left Chicago futures near five-year lows, while US exporters search for alternative buyers in Europe and SE Asia.
Typically, China turns to US beans from September through January before Brazil’s new harvest enters the market, but that seasonal pattern has been disrupted. Analysts note Brazil may still fall short of China’s full import needs by two to five million tons later in the season, which could create an opening for US shipments if trade terms allow.
President Trump has recently urged China to boost US soybean purchases, suggesting they could buy up to four times the current amount. The American Soybean Association has also called for a trade deal that includes significant soybean commitments, warning that without one, US farmers risk losing further market share to Brazil. Soybeans could become a key focus if US-China trade negotiations advance.
China Targets Canada and EU in New Trade Moves
China has escalated trade tensions on several fronts. Last week, Beijing announced preliminary anti-dumping duties of 75.8% on Canadian canola—which took effect on August 14, 2025, effectively cutting off its largest supplier. The loss of the Chinese market to Canada sent ICE November canola futures down 6.5%.
It has also raised concerns over supply disruptions, as China relies on canola for both cooking oil and animal feed. Australia is emerging as the main alternative. State-owned trader COFCO has booked 50,000 tonnes of new-crop Australian canola for November-December shipment — the first such purchase since 2020, when phytosanitary restrictions halted trade. Priced below USD 600/tonne including freight, the deal could be followed by more cargoes, though analysts caution Australia cannot fully replace Canadian volumes.
Canola Field, Australia
In parallel, China has also extended its year-old anti-subsidy investigation into EU dairy imports by six months, pushing the deadline to February 2026. The probe, which covers cheese, milk and cream products, is widely seen as retaliation for Brussels’ anti-subsidy investigation into Chinese-made EVs launched in 2023. Beijing has already rolled over a separate anti-dumping probe into European pork and in July imposed duties on EU brandy, though major cognac producers were spared under a minimum-price arrangement.
EU industry groups had expected the dairy extension, given further technical visits scheduled for September. Still, exporters — worth roughly EUR 650 million a year to China — now face prolonged uncertainty
Piracy Surges in Asian Waters
Piracy and armed robbery incidents in Asia have surged in 2025, with 112 cases reported so far, surpassing the total of 107 incidents recorded in 2024. The majority of these incidents are lower-level Category 3 and 4 cases, concentrated in the Straits of Malacca and Singapore (SOMS), a longstanding hotspot for regional maritime crime.
Keppel Container Terminal, Singapore
According to a recent report by Container News, the first half of 2025 alone saw 95 incidents, marking an 83% increase compared to the same period in 2024. Notably, over 80% of these incidents occurred in SOMS. Analysts caution that if this upward trend continues, 2025 could become one of the most piracy-prone years in over a decade, highlighting ongoing risks for shipping and regional supply chains.
Rising piracy in SOMS has raised concerns about shipping disruptions. While most 2025 incidents are lower level, a continued surge could force operators to consider longer alternative routes, similar to how vessels have rerouted around high-risk areas like the Red Sea in response to Houthi attacks. Such detours increase transit times and costs, highlighting the operational risks posed by escalating maritime crime.
US Growers Push for Expanded Ethanol Use
USDA’s August WASDE report projects a record 16.7 billion bushel corn crop for 2025, raising concerns about oversupply. Additional acreage in states such as Kansas, North Dakota, and South Dakota, combined with moderate crop ratings in key regions, makes the projected national yield uncertain.
The large harvest has pushed the national average corn price down to USD 3.90/bushel—the lowest since 2019—leaving many producers below break-even and heightening pressure on the market.
In response, the National Corn Growers Association is calling on Congress and the administration to expand year-round E15 ethanol use, which could consume an estimated 457 million bushels, and to pursue new international trade frameworks to build demand abroad.
The US has already secured a pledge from the UK to import 1.4 billion litres of corn ethanol, and has also sought to increase exports to India, though India has declined to buy additional corn and ethanol—an outcome that may have contributed to souring trade talks. These measures are seen as crucial to offset the effects of record supply and support farm profitability in the US.
