Oil prices increased from a five-month low following statements from US President Donald Trump regarding Indian Prime Minister Narendra Modi’s commitment to cease imports of Russian oil, a development that could tighten global supplies. Brent crude traded above $62 a barrel after a decline of 2.2 percent over the past two sessions, while West Texas Intermediate hovered around $59. Trump did not provide a specific timeline for India’s decision, and there has been no official confirmation from India.
India, along with China, has benefited from discounted Russian oil, made available under a price cap mechanism established by the Group of Seven (G7) to maintain supply while restricting Moscow’s financial resources amid its ongoing conflict in Ukraine. However, US officials have accused Indian companies of profiting excessively from these transactions, which have become a contentious issue as India strives to accelerate trade negotiations. India’s trade secretary announced on Wednesday that the country has the capability to import an additional $15 billion worth of oil from the US.
“This is bullish news for sure,” stated Mukesh Sahdev, founder and CEO of the analysis firm Xanalysts in Sydney. He noted that India has been sourcing approximately three times more oil from Russia than from the US in recent months, indicating that to completely halt Russian purchases, India would need to procure alternatives from Middle Eastern suppliers.
In a related development, the UK imposed sanctions on Russia’s largest oil producers, as well as on two Chinese energy firms and India’s Nayara Energy Ltd., due to their engagement with Russian oil. Western nations are intensifying efforts to constrain Russia’s energy sector in an attempt to limit funds flowing into the Kremlin and reduce President Vladimir Putin’s capacity to sustain military operations in Ukraine.
Crude prices have decreased this month as escalating trade tensions between the US and China raised concerns about demand from the world’s top two oil consumers. Major trading houses warned that an anticipated oversupply of oil is beginning to materialize. Trump characterized US relations with China as a trade war, even as Treasury Secretary Scott Bessent suggested delaying high tariffs on Chinese goods to negotiate a resolution over critical minerals.
Additionally, an industry report revealed that US crude inventories rose by 7.4 million barrels last week, marking the largest increase since July, pending confirmation from official statistics expected later on Thursday.
