The international benchmark contract, Brent North Sea crude, rose 5.4 percent, while West Texas Intermediate rose 5.7 percent.
Trump on Wednesday announced new sanctions on Russia’s two biggest oil companies, Rosneft and Lukoil, and said his peace talks with President Vladimir Putin would go “nowhere.”
The move was accompanied by a new round of punishment by the European Union as part of efforts to pressure Moscow to end its three-and-a-half-year invasion of Ukraine.
“These new sanctions are likely to have a real impact,” said Arne Lohmann Rasmussen, an analyst at Global Risk Management.
Russia’s Foreign Ministry warned that the sanctions threatened to jeopardize diplomatic efforts to end the war in Ukraine, and that it had developed “strong immunity” from doing so. Trump had resisted imposing new restrictions on Moscow for months, but his patience broke after plans for a new summit with Putin in Budapest collapsed. He had already claimed that India had agreed to reduce its Russian oil purchases as part of a US trade. deal, something New Delhi has not confirmed.
Bloomberg on Thursday quoted unnamed Indian refinery sources as saying that flows of Russian crude were expected to fall close to zero due to the US sanctions.
“Given that Rosneft and Lukoil together produce about four million barrels per day, if India were to reduce its purchases it would seriously hamper Russia’s ability to finance its war,” said Trade Nation analyst David Morrison.
Trump in August raised tariffs on Indian exports to the United States to 50 percent, with Trump aides accusing India of fueling Russia’s war in Ukraine.
Elsewhere on Thursday, major stock markets diverged as traders assessed the US-China trade outlook and a fresh set of mixed corporate earnings.
Beijing said it will hold tariff talks with Washington from Friday, calming trade fears over reports of possible US restrictions on software exports to China.
Wall Street opened more or less flat, but Tesla shares fell more than five percent lower.
Elon Musk’s electric car company reported a big drop in profit after trading ended Wednesday, citing a drop in U.S. tariffs and other expenses that offset increased sales.
Gold, seen as a safe haven, recovered from recent heavy selling to rise more than one percent to around $4,100 an ounce, although still well below the record high of $4,381 hit earlier this week.
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