(Bloomberg) — Oil inched higher from a five-month low amid mixed signals on US President Donald Trump’s push to stop India’s purchases of Russian crude.
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Brent traded near $62 a barrel after sliding 2.2% over the previous two sessions. Trump said Indian Prime Minister Narendra Modi had vowed to halt buying oil from Russia, a move that could squeeze global supply, without giving an exact timeline.
India’s foreign ministry said it was unaware of such talks between the two leaders, while three of six Indian oil executives said the country’s imports of Russian oil would drop in the short term.
New Delhi, along with neighbor China, has made the most of discounted Russian supplies accessible under a Group of Seven price cap mechanism that was designed to keep oil flowing while limiting Moscow’s access to funds for its war in Ukraine.
However, senior US officials have accused Indian businesses of profiteering and the purchases have been a main sticking point as New Delhi seeks to fast-track trade talks. Its trade secretary on Wednesday said his nation has the capacity to purchase an additional $15 billion of oil from the US.
“This is bullish news for sure,” said Mukesh Sahdev, founder and chief executive officer of analysis firm Xanalysts in Sydney. India has been buying about three times as much oil from Russia as from the US in recent months, and would need to source alternatives from Middle Eastern nations to completely halt those purchases, he said.
Meanwhile, the UK slapped sanctions on Russia’s biggest oil producers, two Chinese energy firms and Indian refiner Nayara Energy Ltd. because of their handling of Russian fuel. Western nations are turning the screws on Russia’s energy sector in a bid to curb the flow of petrodollars to the Kremlin and limit President Vladimir Putin’s ability to finance the war in Ukraine.
Crude has fallen this month as increased trade tensions between the US and China raised concerns about demand in the two biggest crude consumers, and as major trading houses said a long-anticipated oversupply is already starting to emerge.
Meanwhile, an industry report indicated US inventories jumped by 7.4 million barrels last week. That would be the biggest increase since July if confirmed by official data due later Thursday.
