Quick overview

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Oil prices rose in London trade on Wednesday, recovering from a five-week low hit in the prior session as the prospect of tighter US sanctions against Russian oil buyers offered some support.
But oil’s gains were limited, while the recovery also appeared fragile amid sustained concerns over increased OPEC+ production and weak global demand.

Brent oil futures for October rose 0.5% to $68 a barrel, while West Texas Intermediate crude futures rose 0.5% to $64.53 a barrel

API data that showed a much larger-than-expected draw in US oil inventories last week—4.2 million barrels, compared to expectations of a 1.8 million barrel draw—also gave oil hope. In response to New Delhi’s ongoing purchases of Russian oil, US President Donald Trump reiterated his threats on Tuesday to raise trade tariffs against India.

Trump announced that he would impose additional tariffs on India this week. The president of the United States mainly criticized New Delhi for its ongoing purchases of Russian oil, which he said were financing Russia’s conflict with Ukraine.

Trump’s criticism has been dismissed by India, which is reportedly going to keep purchasing Russian oil shortly. About 80% of India’s crude needs are imported, making it a highly reliant country. Trump also threatened to impose higher tariffs on China, a significant purchaser of Russian oil. Oil prices may benefit from a tightening of global supplies as a result of China and India ceasing to buy Russian oil. Nevertheless, there seemed to be some movement in de-escalation in the conflict between Russia and Ukraine.

According to Bloomberg, Moscow was weighing its options to avoid US tariffs, including a possible halt to airstrikes. This week, Steve Witkoff, the US Special Envoy to the Middle East, is also scheduled to travel to Moscow.