The rally followed the United States’ announcement of sweeping sanctions on Russia’s top oil producers, raising fears of a fresh supply crunch and triggering volatility across global energy markets.
In international trade, Brent crude futures were last at $65.45 a barrel, down 0.8% in early Asian trade but still on track for a 7% weekly gain. U.S. West Texas Intermediate (WTI) slipped 0.8% to $61.28. Both benchmarks had jumped more than 5% on Thursday after Washington imposed what it called “massive sanctions” on Rosneft and Lukoil—Russia’s two largest oil companies—over the war in Ukraine.
U.S. President Donald Trump said the sanctions aimed to “move Russian President Vladimir Putin to the negotiating table and bring an end to Moscow’s brutal war in Ukraine.” The measures, following months of lobbying by Kyiv and bipartisan pressure in Washington, target the core of Russia’s oil industry, its principal economic engine.
“The sanctions against oil giants Rosneft and Lukoil followed months of calls from Ukrainian President Volodymyr Zelenskyy, as well as bipartisan pressure on Trump to hit Russia with tougher oil sanctions, the engine that has allowed Russia to continue the conflict even while largely isolated internationally,” the Associated Press reported.
Global ripple effects
The sanctions immediately impacted global oil markets. Reuters reported that Russian President Putin remained defiant, even as Chinese state oil majors temporarily suspended Russian crude purchases. Refiners in India—the largest buyer of seaborne Russian oil—are also expected to cut crude imports sharply, industry sources told Reuters.
Rosneft and Lukoil, together, account for over 5% of global oil output, with Russia being the world’s second-largest crude producer in 2024, after the U.S., according to U.S. energy data.
Brokerages weigh in
Analysts at Citi noted that the oil rally coincided with renewed focus on U.S.-India discussions over reducing Russian oil imports, possibly as part of a broader trade deal.
Citi expects Brent to average around $60 a barrel through 1QFY26, citing “underlying bearish balances expected through 4QFY25, keeping downward pressure on prices.” The firm added that a faster-than-expected Russia-Ukraine deal could push Brent to a bear case of $50–55, though bullish risks may cause occasional spikes.
Markets now await the November 2 OPEC+ meeting to see whether the group may pause or adjust previous production decisions. OECD commercial crude inventories have stabilized above last year’s levels over the past quarter, Citi said.
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