Global oil prices climbed sharply on Thursday, rising more than 2% in early trading as new US sanctions against Russia’s two largest oil producers — Rosneft and Lukoil — fueled fresh concerns about supply disruptions.
Brent crude surged 2.12% to trade at $64.29 per barrel, up from $62.95 in the previous session. Similarly, the US benchmark, West Texas Intermediate (WTI), gained 2.3% to reach $60.53 per barrel, compared to $59.15 a day earlier.
The United States Treasury Department announced sanctions against Rosneft, Lukoil, and several of their subsidiaries, citing Moscow’s continued lack of commitment to peace talks aimed at ending the ongoing war in Ukraine. The sanctions are designed to restrict Russia’s ability to generate oil revenue that funds its military operations.
In a statement, the Treasury reiterated that Washington remains committed to promoting peace and will continue to use all available tools to pressure Russia into constructive negotiations. The latest sanctions target dozens of subsidiaries involved in exploration, refining, and natural gas operations, including Rosneft units such as Bashneft Dobycha, RN Tuapse Oil Refinery, and Yuganskneftegaz, as well as Lukoil’s Perm and Kaliningradmorneft divisions.
Under the measures enforced by the Office of Foreign Assets Control (OFAC), all assets of these entities under US jurisdiction are frozen, and American individuals or businesses are prohibited from conducting transactions with them. Any company in which sanctioned entities hold a 50% or greater interest will automatically fall under the restrictions.
OFAC clarified that the sanctions are intended to influence Russia’s actions, not to punish ordinary citizens, emphasizing that the ultimate goal is to drive behavioral change within Moscow’s leadership.
Market analysts have warned that the sanctions could tighten global oil supply, particularly if major buyers like India reduce imports from Russia under diplomatic pressure. Such a shift could redirect demand toward US and Middle Eastern crude, pushing prices higher in the Atlantic basin.
Indian refiners have reportedly begun reviewing their procurement plans to avoid potential exposure to sanctioned entities. Meanwhile, new data from the US Energy Information Administration (EIA) showed declining inventories, further supporting the upward trend in prices.
According to the EIA, US commercial crude stockpiles dropped by 1 million barrels last week to 422.8 million, contrary to market expectations of a 2.2 million-barrel increase. Gasoline inventories also fell by 2.1 million barrels to 216.7 million, while domestic oil output slipped by 7,000 barrels per day to 13.62 million bpd.
The combined impact of tightening supply, falling inventories, and geopolitical tensions has reinforced bullish sentiment in the oil market, keeping investors on alert for further price volatility.
