WASHINGTON, United States – Oil prices jumped about 4% on Thursday, extending gains from the previous session, as buyers in India reconsidered their purchases of Russian oil after the United States imposed sanctions on major Russian oil companies Rosneft and Lukoil amid the escalating conflict in Ukraine.
Brent crude futures rose about $2.45, or 3.91%, to $65.04 a barrel by 05:24 GMT, while US West Texas Intermediate (WTI) crude futures rose $2.29, or 3.95%, to $60.79 a barrel.
The United States announced its readiness to take further punitive measures, while urging Moscow to immediately agree to a ceasefire in the Russian-Ukrainian war.
In a related development, US crude oil, gasoline, and distillate inventories declined, supporting higher oil prices during the session.
US President Donald Trump hesitated for months to impose sanctions on the Russian energy sector, hoping the move would push Moscow to end the fighting in Ukraine, but he stressed that he felt the time was right to take tough action.
Britain imposed similar sanctions on Rosneft and Lukoil last week, while European Union countries approved the 19th package of sanctions against Russia, which includes a ban on imports of Russian liquefied natural gas.
“President Trump’s new sanctions on Russia’s largest oil companies aim to choke off the revenues the Kremlin uses to fund the war, a move that could lead to a reduction in the actual flow of Russian barrels,” said Priyanka Sachdeva, market analyst at Philip Nova.
Following the announcement of the US sanctions, Brent and West Texas Intermediate crude futures rose by more than $2 per barrel, also supported by a surprise drop in US oil inventories.
However, the market remains skeptical about the extent to which these US sanctions will significantly shift global oil supply, limiting price gains.
