Oil prices jumped 3% on Thursday, extending gains from the previous session, as Indian buyers began reviewing their purchases of Russian oil after the US imposed sanctions on key suppliers Rosneft and Lukoil over the war in Ukraine, UNN reports, citing Reuters.
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Brent crude futures rose $1.94, or 3.1%, to $64.53 a barrel by 04:28 GMT (07:28 Kyiv time), while US West Texas Intermediate crude futures rose $1.89, or 3.2%, to $60.39.
The US has stated its readiness to take further action, calling on Moscow for an immediate ceasefire in the war in Ukraine.
Last week, the UK imposed sanctions on Rosneft and Lukoil. EU countries also approved the 19th package of sanctions against Russia over the war, which includes a ban on imports of Russian LNG.
EU approves 19th package of sanctions against Russia22.10.25, 22:25 • [views_28926]
"President Trump's new sanctions, which target Russia's largest oil companies, are aimed at depriving the Kremlin of war revenues. This move could limit physical flows of Russian oil and force buyers to redirect it to the open market," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Immediately after the announcement of US sanctions, Brent and WTI crude futures rose by more than $2 a barrel, also boosted by an unexpected draw in US inventories.
"If New Delhi cuts purchases under US pressure, we could see demand in Asia reorient towards US oil, which would push up prices in the Atlantic oil market," she added.
Indian state refiners said they were reviewing their purchases of Russian oil to ensure no direct supplies from Rosneft and Lukoil after the US sanctions.
Meanwhile, private company Reliance Industries, India's largest buyer of Russian oil, announced plans to adjust oil imports from Moscow in accordance with Indian government recommendations.
Sources said that Reliance plans to sharply reduce imports of Russian oil due to EU and US sanctions, and other Indian refiners are also likely to make significant cuts.
However, market skepticism about whether US sanctions would lead to a real fundamental shift in the supply-demand balance limited the rise in oil prices.
The new sanctions certainly raise the stakes in US-Russia relations, but I believe that the jump in oil prices is more a spontaneous market reaction than a structural shift.
"So far, almost all sanctions against Russia imposed over the past 3.5 years have failed to significantly affect either the country's production volumes or oil sales revenues," he said, adding that some buyers of Russian oil in India and China continued purchases.
In the short term, markets expect the OPEC+ supply surplus, driven by the unwinding of production cuts, to be a key pricing factor.
"The three factors I will be watching in November are OPEC+ cuts, China's oil inventory build, and the wars in Ukraine and the Middle East, in that order," Galimberti said.