Oil prices climbed over 3% on Thursday, extending gains from the previous session, as India began reassessing its Russian oil imports following new U.S. sanctions on major energy suppliers Rosneft and Lukoil over the war in Ukraine.
By 06:14 GMT, Brent crude futures were up $2.12, or 3.4%, at $64.71 per barrel, while U.S. West Texas Intermediate (WTI) gained $2.09, or 3.6%, to $60.59 per barrel. The rally was also supported by a surprise drop in U.S. oil inventories, signaling tightening supply.
Washington said it was prepared to take further measures against Moscow unless it agrees to a ceasefire in Ukraine. The United Kingdom also sanctioned Rosneft and Lukoil last week, while the European Union approved its 19th sanctions package, which includes a ban on Russian LNG imports.
According to Phillip Nova senior analyst Priyanka Sachdeva, President Trump’s sanctions “aim squarely at cutting Kremlin war revenues,” a move that could disrupt Russian oil flows and force buyers to seek alternative suppliers in global markets. She added that if India reduces its purchases under U.S. pressure, Asian demand may shift toward U.S. crude, supporting Atlantic market prices.
Industry sources said Indian refiners are now likely to sharply cut Russian oil imports following the new sanctions. India, currently the largest buyer of seaborne Russian crude, imported around 1.7 million barrels per day during the first nine months of this year.
Privately-owned Reliance Industries, the country’s top buyer of Russian oil, may significantly scale back or suspend imports, according to two sources familiar with the matter. Most state refiners already avoid direct purchases from Rosneft and Lukoil, typically buying through intermediaries instead.
However, analysts remain cautious about whether the new sanctions will lead to a lasting supply-demand shift. Claudio Galimberti, global markets director at Rystad Energy, said the oil rally appears to be a short-term reaction rather than a structural change.
He noted that previous rounds of sanctions have done little to reduce Russia’s oil output or revenues, as India and China continue to buy discounted crude.
Looking ahead, Galimberti said traders will be watching three key factors shaping the oil market in November: OPEC+ production increases, China’s crude stockpiling, and developments in the Ukraine and Middle East conflicts.
