Oil prices jumped more than 3% on Thursday, extending gains from the previous session, as Indian buyers began reviewing their purchases of Russian crude following U.S. sanctions on major suppliers Rosneft and Lukoil over the Ukraine war.
By 0614 GMT, Brent crude futures rose $2.12, or 3.4%, to $64.71 per barrel, while U.S. West Texas Intermediate (WTI) crude futures gained $2.09, or 3.6%, to $60.59 per barrel.
The U.S. signaled readiness to take further action, calling on Moscow to agree immediately to a ceasefire in Ukraine. Britain and EU countries have also imposed sanctions on Russian oil, with the EU’s 19th package including a ban on Russian LNG imports.
“President Trump’s fresh sanctions hitting Russia’s biggest oil houses aim squarely at choking Kremlin war revenues—a move that could tighten Russian crude flows and force buyers to re-route volumes onto the open market,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Following the announcement of U.S. sanctions, both Brent and WTI futures rose sharply, also supported by a surprise drop in U.S. crude inventories.
Indian refiners, the largest buyers of discounted Russian seaborne crude since Moscow’s 2022 invasion of Ukraine, are expected to significantly cut imports under the new sanctions. Reliance Industries, India’s top buyer of Russian oil, plans to reduce or halt imports completely, according to industry sources.
However, market analysts cautioned that the price surge may be a short-term reaction rather than a structural shift. Claudio Galimberti, global market analysis director at Rystad Energy, noted that past sanctions have largely failed to reduce Russian oil production or revenues, and some buyers in India and China have continued purchases despite restrictions.
Looking ahead, OPEC+ supply adjustments, China’s crude stockpiling, and geopolitical tensions in Ukraine and the Middle East are expected to be key drivers of oil prices in the near term.
Source: Reuters
