Oil prices rose by about 1% on Thursday after U.S. President Donald Trump announced that Indian Prime Minister Narendra Modi pledged that India would stop purchasing oil from Russia, a move that could reduce global supply.
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Brent crude futures climbed 54 cents, or 0.87%, to $62.45 per barrel, while West Texas Intermediate (WTI) futures rose 57 cents, or 0.98%, to $58.84.
Both contracts had hit their lowest levels since early May in the previous session, affected by U.S.-China trade tensions and the International Energy Agency’s warning of a large supply surplus next year due to increased production by OPEC+ and competitors amid weak demand.
U.S. Targets India and China
Trump said on Wednesday that India—which relies on Russia for about one-third of its oil imports—would stop buying Russian oil. He indicated that the U.S. would then seek to persuade China to follow suit, as part of Washington’s efforts to cut energy revenue to Moscow and pressure it to negotiate a peace agreement in Ukraine.
Sources told Reuters that some Indian refineries are preparing to gradually reduce their imports of Russian oil.
Japan Under Pressure
In a related development, U.S. Treasury Secretary Scott Bessent stated on Wednesday that he had informed Japanese Finance Minister Katsunobu Kato that the Trump administration expects Japan to stop importing Russian energy.
India and China are the largest maritime importers of Russian crude, which is subject to U.S. and European sanctions. For months, Modi resisted U.S. pressure to halt purchases, defending the deals as essential for national energy security.
Analyst Tony Sycamore of IG said: “On the margin, this is a positive development for crude oil prices as it removes a major buyer (India) of Russian oil.”
New British Sanctions
Alongside U.S. measures, the British government announced new sanctions on Wednesday directly targeting Russian energy giants Rosneft and Lukoil, along with other entities including four oil refineries, Shandong Yulong Petrochemical in China, 44 tankers in the “shadow fleet” transporting Russian oil, and India’s Nayara Energy Ltd., which is Russian-owned.
Awaiting U.S. Inventory Data
Investors are also awaiting the U.S. Energy Information Administration (EIA)’s weekly inventory report later Thursday, following mixed data from the American Petroleum Institute (API).
API figures released Wednesday showed rising crude and gasoline inventories in the U.S. last week, while distillate stocks fell. Crude inventories rose by 7.36 million barrels, gasoline stocks increased by 2.99 million barrels, and distillate stocks declined by 4.79 million barrels compared to the previous week.
While the drop in distillate inventories indicates stronger diesel demand, the increase in crude and gasoline stocks suggests that overall demand in the U.S., the world’s largest oil consumer, remains sluggish. Analysts expect U.S. crude stocks to have risen by about 0.3 million barrels last week.
— (Agencies)
