Oil Prices Jump Over 3% as India Reconsiders Russian Crude Purchases Amid New U.S. Sanctions

Oil prices climbed more than 3% on Thursday, extending the previous session’s gains, after reports that Indian refiners are reviewing their purchases of Russian crude following new U.S. sanctions on major suppliers Rosneft (ROSN.MM) and Lukoil (LKOH.MM) over Moscow’s war in Ukraine.

As of 0614 GMT, Brent crude futures rose $2.12, or 3.4%, to $64.71 a barrel, while U.S. West Texas Intermediate (WTI) crude gained $2.09, or 3.6%, to $60.59.

The U.S. said it was prepared to take further action as it urged Moscow to agree to an immediate ceasefire in Ukraine. Last week, the U.K. imposed sanctions on Rosneft and Lukoil, while EU countries approved a 19th sanctions package against Russia, including a ban on imports of Russian LNG.

“The latest sanctions by President Trump on Russia’s two biggest oil firms are aimed squarely at cutting off the Kremlin’s war revenue,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. “This move could disrupt the physical flow of Russian barrels and force buyers to reroute volumes through open markets.”

Oil futures jumped more than $2 per barrel immediately after the U.S. announcement, further supported by a drop in U.S. crude inventories.

Sachdeva added, “If New Delhi yields to U.S. pressure and scales back purchases, we could see Asian demand shift toward U.S. crude—pushing Atlantic prices higher.”

India’s Refiners Weigh Options

Industry sources said Thursday that Indian refiners are preparing to sharply reduce imports of Russian oil in response to the new sanctions. Since Moscow’s 2022 invasion of Ukraine, India has become the largest buyer of discounted seaborne Russian crude, importing about 1.7 million barrels per day in the first nine months of this year.

Two sources familiar with the matter said Reliance Industries, India’s top private buyer of Russian crude, is planning to scale back or potentially halt such imports.

State-run refiners, by contrast, rarely purchase oil directly from Rosneft or Lukoil, typically buying through intermediaries, trade sources said.

Market Reaction Remains Cautious

Despite the initial surge, traders remained unsure whether U.S. sanctions would cause a fundamental shift in global supply and demand.

“The new sanctions certainly heighten U.S.-Russia tensions,” said Claudio Galimberti, global market analysis director at Rystad Energy, “but I see this price jump as a knee-jerk market reaction rather than a structural change.”

He noted that most of the sanctions imposed on Russia over the past 3½ years have failed to significantly dent its production volumes or oil revenues, with many buyers in India and China continuing to purchase Russian crude.

OPEC+ and Geopolitical Outlook

Markets are also watching a potential OPEC+ supply surplus, which could become a major price driver once production cuts are phased out.

“In November, I’ll be watching three things closely—in this order,” Galimberti said. “The unwinding of OPEC+ cuts, China’s crude stockpiling, and the wars in Ukraine and the Middle East.”