Right after the U.S. sanctions were unveiled, Brent and WTI futures rose by more than $2 a barrel, boosted as well by a surprise decline in US stockpiles.
The impact of sanctions on oil markets will depend on how India reacts and if Russia finds alternative buyers, said UBS analyst Giovanni Staunovo.
Indian refiners are expected to sharply curtail imports of Russian oil due to the new sanctions, industry sources said on Thursday.
But scepticism in the market about whether the U.S. sanctions would result in a fundamental shift in supply and demand limited gains.
On the demand side, U.S. crude oil, gasoline and distillate inventories fell last week as refining activity and demand strengthened, the Energy Information Administration said on Wednesday.
An overview.
businesses.
Due to the conflict in Ukraine, the US sanctions Lukoil and Rosneft.
Indian refineries are examining the oil they buy from Russia.
U. S. Strong refining and demand have caused crude and fuel stocks to decline.
LONDON, Oct. 23 (Reuters) – Oil prices added to their gains from the previous session on Thursday, rising more than 4 percent after the U. S. imposed penalties on Rosneft (ROSN), a significant Russian supplier. MM), Lukoil (LKOH) and a new tab open. MM), opens a new tab regarding the conflict in Ukraine.
At 08:41 GMT, Brent crude futures were up $2.71, or 4.3 percent, at $65 per barrel, while U. S. . At $61 point, West Texas Intermediate crude futures were up $2.56, or 4 points, 4 percent.
Following the U.S. S. . Analyst Ole Hansen of Saxo Bank says that since sanctions were implemented, refineries in China and India will have to look for other suppliers in order to stay in the Western banking system.
The U. A. declared that it was ready to act further and urged Moscow to consent to a ceasefire in its conflict in Ukraine right away.
Last week, the UK imposed sanctions on Lukoil and Rosneft. A prohibition on the importation of Russian LNG is part of the 19th set of sanctions against Russia for the war that the EU has approved separately.
Directly following the U. A. Following the announcement of sanctions, Brent and WTI futures increased by over $2 per barrel, helped in part by an unexpected drop in US stockpiles.
The way India responds and whether Russia finds other buyers will determine how the sanctions affect the oil markets, according to Giovanni Staunovo, an analyst at UBS.
Industry sources said Thursday that the new sanctions are likely to cause Indian refiners to drastically reduce their imports of Russian oil. Following Moscow’s invasion of Ukraine in 2022, India emerged as the biggest purchaser of discounted seaborne Russian crude.
According to two people with knowledge of the situation, privately held Reliance Industries, the largest Indian purchaser of Russian crude, intends to cut back on or stop these imports entirely.
However, market doubts about whether the U.S. S. . Sanctions would limit gains and cause a fundamental shift in supply and demand.
According to Claudio Galimberti, an analyst at Rystad Energy, “nearly all of the sanctions against Russia for the past three to five years have mostly failed to dent either the volumes produced by the country or the oil revenues.”.
Concerns about oversupply following OPEC+ production increases have caused oil prices to decline over the past month.
Regarding the demand side, U. S. According to the Energy Information Administration on Wednesday, last week saw a decline in crude oil, gasoline, and distillate inventories as refining activity and demand increased.
Katya Golubkova reported from Tokyo, while Florence Tan, Tom Hogue, and Kim Coghill edited the story.
