Core Viewpoint - The article discusses the significant drop in U.S. crude oil inventories, which was three times greater than expected, alongside the ongoing geopolitical tensions from the Russia-Ukraine conflict, leading to an increase in oil prices. The interplay of these factors is reshaping the oil pricing landscape, establishing a new norm of $60 to $70 per barrel for oil prices [1][2][3]. Group 1: Oil Price Dynamics - U.S. crude oil inventories fell by 6 million barrels, significantly exceeding the expected decrease of 1.8 million barrels, indicating strong demand [2]. - As of August 21, international oil prices rose, with West Texas Intermediate crude settling at $63.52 per barrel (up 1.29%) and Brent crude at $67.61 per barrel (up 1.24%) [1]. - The decline in U.S. inventories is attributed to increased refinery processing and rising exports, despite a simultaneous increase in Cushing crude oil inventories suggesting potential demand weakness [2][3]. Group 2: Geopolitical Factors - The ongoing Russia-Ukraine conflict has led to a complex interplay of sanctions and counter-sanctions, with Russia maintaining its oil supply to India, which accounts for nearly 35% of its total oil imports [1][2]. - The U.S. has imposed a 25% tariff on Indian goods due to India's procurement of Russian oil, indicating a shift in global oil trade dynamics [1][2]. - The geopolitical landscape is evolving, with India's "strategic ambiguity" policy influencing the oil power structure [4]. Group 3: Soft Power Analysis - The analysis model indicates that the recent oil price fluctuations are a result of a re-evaluation of soft power elements, with the soft power value of oil increasing to 58%, up 12 percentage points since the beginning of the year [3]. - The three key soft power elements influencing oil pricing are resource control (Russia's oil supply to India), rule-making authority (U.S. tariffs reshaping trade rules), and value dominance (the ongoing Ukraine crisis enhancing risk premiums) [3][4]. - The model predicts that oil prices will stabilize in the $60 to $70 range in the short term, with geopolitical factors becoming increasingly significant in the long term [4].