Crude Oil Skyrockets As U.S. Gets Aggressive With Russia

(RTTNews) - Crude oil catapulted on Thursday, extending gains from the past two sessions, as the U.S. takes up the "sanctions route" against Russia.

WTI Crude Oil for December delivery was last seen trading up by $3.22 (or 5.50%) at $61.72 per barrel.

To curb Russia's efforts to raise revenue for funding its war against Ukraine, the U.S. Treasury Department announced new sanctions targeting Russian oil majors Rosneft and Lukoil along with some of their subsidiaries.

Rosneft and Lukoil are among the biggest corporations listed on the Moscow Stock Exchange, export around 3.1 million barrels of crude oil per day and are worth $50 billion each.

Following this sudden move by the U.S., 27-member states of the European Union adopted the 19th sanctions package against Russia targeting its shadow fleet of oil tankers and banning its imports of Liquefied Natural Gas.

The sanctions include 117 additional vessels from the "shadow fleet" moving up the total number of blacklisted tankers to around 560.

Russian oil majors, Rosneft and Gazpromneft are on a full transaction ban now.

In the first phase of a Liquefied Natural Gas ban, short-term contracts end after six months, and long-term contracts close from January 1, 2027.

The package also limits the movement of Russian diplomats within the EU.

Earlier this week, U.S. President Donald Trump announced that Indian Prime Minister Narendra Modi had offered assurances that India would restrict its purchases of Russian crude. However, India has not officially confirmed Trump's statements so far.

These collective moves are intended to intensify pressure on Russia, as well as drive demand for crude from other sources.

As a result of these concerted moves by the U.S. and the West successively, oil prices jumped as concerns of supply disruption rise.

Meanwhile the Labor Department is scheduled to release its reading on consumer prices on Friday. Money markets are bracing for a reduction in interest rates by the U.S. Federal Reserve at its upcoming October 28-29 meeting due to recent reports suggesting fragility in the U.S. labor market.

U.S.-China trade tension that was set off by China's measures to curb its rare earth mineral exports is waxing and waning.

The leaders of the two nations are set to meet in South Korea by next week. However, U.S. Treasury Secretary Scott Bessent warned that if China does not change its stance, every critical software exports to China from the U.S. will be inaccessible to China.

The U.S. and China are the world's largest economies and biggest consumers of vital commodities including crude oil. A faceoff between them is pushing oil on the upside.

Crude oil also found support after the U.S. Department of Energy announced plans to buy 1 million barrels of crude oil for delivery to the Strategic Petroleum Reserve.

The DoE intends to take advantage of current low oil prices to help replenish its stockpile. At SPR's 700-million-barrel capacity and its current holdings of 408 million barrels, the intended quantum though symbolic represents the attraction for current low prices.

In the Middle East, as the Trump-backed Gaza Peace Plan is entering its next phase, doubts about Hamas disarming as agreed and who will govern Gaza remain though the situation so far is peaceful.