Oil prices rose sharply in early Asian trade on Thursday, as expectations of tighter supplies were buoyed by U.S. President Donald Trump stating that India agreed to stop buying oil from Russia.
Trump’s comments lent some much-needed support to oil, which was battered by simmering U.S.-China trade tensions and fears of a supply glut earlier this week.
Brent oil futures rose 1.1% to $62.57 a barrel, while West Texas Intermediate crude futures rose 1.1% to $58.89 a barrel by 20:27 ET (00:27 GMT). Both contracts had slumped to a five-month low earlier this week.
Focus in the coming days will be on U.S. inventory data for more cues on the world’s biggest fuel consumer, especially as it grapples with a prolonged government shutdown.
Trump says India will stop buying Russian oil Trump told reporters on Wednesday he was “assured” by Indian Prime Minister Narendra Modi that the country will wind down its purchases of Russian oil “soon.”
While New Delhi was yet to confirm the development, the prospect of India– one of the world’s biggest oil importers– seeking oil from alternative sources pointed to tighter supplies in the coming months.
India and China are the biggest buyers of Russian oil, and have faced growing criticism over buying discounted crude from Moscow and funding its war effort against Ukraine.
Trump had slapped India with 50% trade tariffs in August over its Russian oil buying. He said on Wednesday that he will also attempt to get China to do the same.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. India is likely to face higher oil prices when buying oil from other sources, although this is expected to be offset by general weakness in oil markets.
US-China trade tensions, oversupply fears batter oil prices Despite Thursday’s gains, oil prices were nursing sharp losses this week, as traders fretted over deteriorating U.S.-China trade relations and a dour outlook on demand and supply from the International Energy Administration.
Trade tensions between Washington and Beijing persisted after Trump last week threatened to impose 100% tariffs on China, chiding the country’s rare earth export controls. Trump also threatened to cut off some trade ties with China, drawing a sharp rebuke from Beijing.
Oil prices were also battered by concerns over a looming supply glut, after the IEA forecast a bigger supply overhang in 2026 than previously expected.
The agency warned that oil demand was steadily cooling across the globe, and that ongoing production increases by the Organization of Petroleum Exporting Countries and allies (OPEC+) were likely to push markets into oversupplied territory.
But on the other hand, oil took some support from growing bets that the U.S. Federal Reserve will cut interest rates in October, especially after Chair Jerome Powell signaled dovish earlier this week.
The dollar retreated on Powell’s comments, benefiting commodity markets.
