Crude oil futures rose by more than 3 per cent on Thursday morning after the US imposed sanctions on two major Russian oil companies.
At 9.57 am on Thursday, December Brent oil futures were at $64.51, up by 3.07 per cent, and December crude oil futures on WTI (West Texas Intermediate) were at $60.38, up by 3.21 per cent. November crude oil futures were trading at ₹5,324 on Multi Commodity Exchange (MCX) during the initial hour of trading on Thursday against the previous close of ₹5,151, up by 3.36 per cent, and December futures were trading at ₹5,317 against the previous close of ₹5,168, up by 2.88 per cent.
A press release by the US Department of Treasury said the Office of Foreign Assets Control is imposing further sanctions as a result of Russia’s lack of serious commitment to a peace process to end the war in Ukraine. It said this increases pressure on Russia’s energy sector and degrade the Kremlin’s ability to raise revenue. The US will continue to advocate for a peaceful resolution to the war, and a permanent peace depends entirely on Russia’s willingness to negotiate in good faith. Treasury will continue to use its authorities in support of a peace process, it said.
Quoting the US Treasury Secretary Scott Bessent, the release said: “Now is the time to stop the killing and for an immediate ceasefire. Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine. Treasury is prepared to take further action if necessary to support President Trump’s effort to end yet another war. We encourage our allies to join us in and adhere to these sanctions.”
The action by US targets Russia’s two largest oil companies — Open Joint Stock Company Rosneft Oil Company (Rosneft) and Lukoil OAO (Lukoil) — which are now designated.
Rosneft is a vertically integrated energy company specialising in the exploration, extraction, production, refining, transport, and sale of petroleum, natural gas, and petroleum products. Lukoil engages in the exploration, production, refining, marketing, and distribution of oil and gas in Russia and internationally.
Warren Patterson, Head of Commodities Strategy of ING Think, said the US administration placing sanctions on Russian oil producers Rosneft and Lukoil, which produce more than 5 million barrels a day of oil. Clearly, the concern for the market is oil flows from Russia. “The key question is whether these sanctions are enough to deter buyers of Russian oil, specifically China and India,” he said.
Stating that the sanctions on companies producing more than 5 million barrels a day of oil are significant, he said: “However, if we look back to January, the Biden administration imposed similar sanctions on Russian oil producers, Gazprom Neft and Surgutneftegas, along with sanctions on a large share of Russia’s shadow fleet of tankers. These sanctions had little impact on Russian oil exports.”
“We must wait and see if these latest sanctions are more effective or if Russia can circumvent them, as it did with curbs earlier this year. Regardless, a tougher stance on Russia by the US administration marks a shift in policy. It increases the risk of further sanctions against Russia (and potentially buyers of Russian oil) if there’s little progress on a Russia-Ukraine peace deal,” he said.
Meanwhile, the latest official data on crude oil inventories in the US also supported crude oil prices. According to the US EIA (Energy Information Administration), US commercial crude oil inventories decreased by 1 million barrels for the week ending October 17.
Total motor gasoline inventories decreased by 2.1 million barrels from last week, and distillate fuel inventories decreased by 1.5 million barrels last week.
Total products supplied in the US over the last four-week period averaged 20.5 million barrels a day, down by 0.1 per cent from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.6 million barrels a day, down by 3.6 per cent from the same as the last year period. Distillate fuel product supplied averaged 4 million barrels a day over the past four weeks, up by 0.2 per cent from the same period last year. Jet fuel product supplied was down 0.1 per cent compared with the same four-week period last year.
November nickel futures were trading at ₹1,318.50 on MCX during the initial hour of trading on Thursday against the previous close of ₹1,341.40, down by 1.71 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), November guargum contracts were trading at ₹9,078 in the initial hour of trading on Thursday against the previous close of ₹9,052, up by 0.29 per cent.
December turmeric (farmer polished) futures were trading at ₹15,200 on NCDEX in the initial hour of trading on Thursday against the previous close of ₹15,340, down by 0.91 per cent.
Published on October 23, 2025
