On October 23, global oil prices rose by more than 3%, continuing the upward momentum from the previous trading session. The market reacted to new sanctions imposed by President Donald Trump’s administration against Russian oil giants Rosneft and Lukoil, which prompted Indian buyers to reassess their purchases, Reuters reported.
Source: Gazeta.UA
Brent futures climbed by $2.12 (3.4%) to $64.71 per barrel, while WTI rose by $2.09 (3.6%) to $60.59 per barrel.
According to Priyanka Sachdeva, senior analyst at Phillip Nova, Trump’s new sanctions directly target the Kremlin’s wartime revenues and could reduce physical flows of Russian oil, forcing buyers to shift toward other markets:
“If India cuts purchases under U.S. pressure, demand in Asia will shift toward American oil, pushing Atlantic prices higher.”
Following the announcement of sanctions, Brent and WTI futures immediately surged by more than $2 per barrel. This movement was also supported by an unexpected drop in U.S. inventories, which intensified the perception of supply tightness in the market.
Indian refineries have already announced a review of their procurement strategies to exclude supplies from sanctioned companies. The country’s largest buyer of Russian oil, Reliance Industries, said it plans to reduce imports of Russian crude in line with the Indian government’s recommendations.
However, some experts believe the impact of the sanctions may be short-lived. Claudio Galimberti, Director of Global Analysis at Rystad Energy, noted:
“The rise in oil prices is more of a reflex reaction from the market. Most sanctions against Russia over the past three and a half years have had little effect on its production or revenues.”
In November, analysts expect the key factors influencing the oil market to include OPEC+ production cuts, China’s stockpiling activity, and ongoing wars in Ukraine and the Middle East.