Oil prices resumed their upward trend on Thursday as the U.S. imposed new sanctions against Russian oil firms in an effort to bring the war in Ukraine to an end.
Brent crude futures rose $1.70 or 2.72 percent to $64.29 a barrel, and U.S. West Texas Intermediate crude futures rose 1.67 or 2.85 percent to $60.17 a barrel at 4:08 GMT.
The latest sanctions on Russia apply to Lukoil and Rosneft, two of the largest oil companies in Russia.
U.S. Treasury Secretary Scott Bessent stated on Wednesday that “Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine.”
He further said that Washington “encourages our allies to join us and adhere to these sanctions.” The Treasury also sanctioned dozens of subsidiaries of the two companies, freezing their U.S. assets and barring American companies from engaging in business with them.
The sanctions are based on a 19th package of restrictions adopted by the European Union encompassing a ban on Russian liquefied natural gas imports, and a similar action by the United Kingdom last week, which imposed the same Russian energy giants.
Increasing U.S energy demand also helped in supporting oil prices. The Energy Information Administration reports that U.S. crude, gasoline, and distillate inventories decreased last week due to the increased activity and consumption of refineries.
There was a 961,000-barrel decrease in crude stockpiles to 422.8 million barrels in anticipation of a stockpile up.
Negotiations between US-China
The investors were also keeping watch on what was happening in trade negotiations between the U.S and China, and the officials of both countries were to have a meeting in Malaysia this week.
U.S. President Donald Trump announced on Monday that he would expect to agree to a fair-trade deal with Chinese President Xi Jinping, whom he is expected to meet in South Korea next week.
Trump later verified on Wednesday that he planned to have a lengthy meeting with Xi as part of his future visit.
Meanwhile, the issue of supply was raised again following reports that a proposed summit between Trump and Russian President Vladimir Putin had been postponed, and there were concerns among Western governments that disruptions were likely to be caused by the Asian purchasing of Russian oil.
Trump claimed that in a conversation with the Indian Prime Minister Narendra Modi on Tuesday, indicating that Modi has assured him that India will reduce its Russian oil imports.
Gradually, Indian media announced that the two nations were on the verge of agreeing to a long-pending trade agreement, which would reduce U. S tariffs on Indian products to 15-16 percent as opposed to the 50 percent tariffs currently being faced.
