Oil futures rose Wednesday, bouncing back from a five-week trough hit the day before, supported by expectations of tighter U.S. sanctions on Russian oil buyers.
By 08:55 ET (12:55 GMT), October Brent crude futures were up 1.5%, trading at $68.67 per barrel. Meanwhile, West Texas Intermediate (WTI) crude rose 1.6% to $66.18 per barrel.
Russia Sanctions in Spotlight
President Donald Trump renewed his threats to increase tariffs on India over its continued imports of Russian oil. After imposing reciprocal 25% tariffs last week, Trump said additional duties would be introduced this week.
Trump condemned India’s ongoing Russian crude purchases, suggesting they finance Russia’s conflict with Ukraine. However, India has pushed back on these claims, with indications it will keep importing Russian oil for the near future. The country relies heavily on crude imports, sourcing about 80% of its oil needs.
“If India were to stop buying Russian oil amid tariff threats, we believe the market would be able to cope with the loss of this supply. It would wipe out the surplus we’re expecting in the market through the latter part of this year and much of 2026. This would leave some upside to prices, but a manageable one,” ING analysts said in a note.
They further warned: “The bigger risk is if other buyers also start to shun Russian oil. This would require OPEC to tap into its spare production capacity quickly and aggressively to balance the market. This could result in significant further upside for prices.”
“We should get more clarity later this week, with President Trump’s deadline for Russia to strike a deal with Ukraine on Friday. There’s a US delegation visiting Russia this week. Reports are that President Putin may be willing to offer some concessions, such as an air truce, in order to avoid stricter sanctions and secondary tariffs,” ING added.
The market also received a boost from American Petroleum Institute data showing a surprisingly large 4.2 million barrel drop in U.S. crude inventories last week, well above the anticipated 1.8 million barrel decline.
Balancing Supply and Demand Concerns
Despite the gains on Wednesday, oil prices have been under pressure recently. The drop accelerated after OPEC+ agreed to increase production by 547,000 barrels per day starting in September.
The cartel’s steady output increases this year have raised worries about oversupply in the second half of 2025.
In addition, weak economic data from the U.S. and China released last week intensified fears of slower growth and reduced oil demand among the top global consumers.
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