Oil prices rose from their lowest levels in five months after US President Donald Trump said Indian Prime Minister Narendra Modi had pledged to halt his country's purchases of Russian oil, a move that could tighten global supplies.
Brent crude traded above $62 a barrel after falling 2.2% over the previous two sessions, while West Texas Intermediate crude held near $59 a barrel. Trump did not provide a specific timeline for India to stop purchasing Russian oil, and there has been no official confirmation from New Delhi yet.
India, along with its neighbor China, is among the countries that have benefited most from the steep discounts on Russian oil available under the G7 price cap mechanism, which aims to maintain supplies while restricting Moscow's access to funds for its war in Ukraine.
However, senior US officials have accused Indian companies of making excessive profits from these purchases, a major sticking point in the trade talks that New Delhi is seeking to accelerate with Washington. India's trade minister stated on Wednesday that his country could purchase an additional $15 billion in oil from the United States.
This is definitely positive news, said Mukesh Sahdev, founder and CEO of Sydney-based analyst firm Xanalysts. He explained that India has been buying about three times as much oil from Russia as the United States in recent months, and that it would need alternative sources from the Middle East to be able to completely halt those purchases.
New British sanctions and escalating pressure on Moscow
Meanwhile, the United Kingdom imposed sanctions on Russia's largest oil producers, two Chinese energy companies, and the Indian refiner Nayara Energy, for their dealings in Russian fuel.
This move comes as part of the West's tightening of the noose on the Russian energy sector, aimed at limiting the flow of oil revenues to the Kremlin and undermining President Vladimir Putin's ability to finance the war in Ukraine.
Crude prices have fallen this month as trade tensions between the United States and China have heightened concerns about demand in the world's largest oil consumers, and as global trading houses have announced that a long-expected surplus is beginning to emerge.
Trump said he believes the United States is engaged in a trade war with China, even as Treasury Secretary Scott Besant seeks to extend the suspension of high tariffs on Chinese goods to resolve the dispute over vital minerals.
Meanwhile, an industry report showed that US oil inventories rose by 7.4 million barrels last week, potentially the largest increase since July if confirmed by official data expected later Thursday.
