Oil prices rallied over 3% during Thursday’s Asian session, extending the previous day’s gains, as Indian refiners began reviewing their purchases of Russian crude following new U.S. sanctions on major suppliers Rosneft and Lukoil.
By 4:15 pm AEDT (5:15 am GMT), Brent crude futures rose $2.15 or 3.4%, to $64.74 per barrel, while U.S. West Texas Intermediate (WTI) gained $2.07 or 3.5%, to $60.57 per barrel.
The sharp gains came after Washington announced a new round of penalties targeting Russia’s top oil producers over the ongoing war in Ukraine. The White House said it was prepared to take further action unless Moscow agrees to an immediate ceasefire.
Britain imposed similar measures on Rosneft and Lukoil last week, while European Union member states approved a 19th package of sanctions that includes a ban on imports of Russian liquefied natural gas (LNG).
Oil benchmarks surged more than $2 per barrel immediately after the sanctions were announced, supported further by data showing a surprise draw in U.S. crude inventories.
The Energy Information Administration (EIA) reported a decline of 961,000 barrels last week, compared with expectations for a 1.2 million-barrel build.
India’s state-owned refiners said they were reassessing their supply contracts to ensure that no purchases are made directly from Rosneft or Lukoil following the U.S. sanctions.
Privately held Reliance Industries, India’s largest buyer of Russian crude, also confirmed plans to adjust its import volumes to comply with government guidance.
