Oil prices climbed as much as 5% on Thursday after the Trump administration unveiled sanctions on two major Russian energy companies in an effort to end the war in Ukraine.
West Texas Intermediate (CL=F) futures rose more than 5% to hover above $61 per barrel. Meanwhile, Brent futures also climbed to around $65, on pace for their biggest one-day move since June 13 when tensions in the Middle East escalated.
The move to sanction Russian oil giants Rosneft and Lukoil comes on the heels of tougher measures from European allies to stop Moscow from capitalizing on its energy products in order to stop the Ukraine conflict.
“The key question is enforcement” Rebecca Babin, CIBC Private Wealth senior energy trader told Yahoo Finance. “How aggressively those measures are enforced will determine how much of an actual impact these sanctions have on flows.”
The White House also announced on Tuesday that a meeting scheduled between Trump and Russian leader Vladimir Putin was off.
“It didn’t feel right to me,” Trump said on Wednesday afternoon. “It didn’t feel like we were going to get to the place we have to get, so I canceled it. But we’ll do it in the future.”
Oil is coming off a six-month low as increased supply from the Organization of Petroleum Exporting Countries and its allies have flooded the market and renewed tariff tensions with China have weighed on demand outlooks.
The US Department of Energy asked for bids for oil purchases for its strategic petroleum reserve as WTI prices recently hovered below $60 per barrel.
“The move by the US shed a light on why the US stocked up its strategic reserves earlier in the week,” wrote Kyle Rodda, senior financial market analyst at Capital.com.
“The administration clearly sees oil prices at a level around or below fair value and low enough to enact policies that could disrupt global supply,” Rodda added.
Last week, the International Energy Agency trimmed its demand forecast while raising its surplus expectations for 2026 as production from the Organization of the Petroleum Exporting Countries and its allies increases.
Wall Street has been warning of a supply glut going into 2026.
Goldman Sachs predicts Brent will fall to $56 per barrel by the end of next year and WTI will drop to $52 per barrel.
US President Donald Trump announced new sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, on Wednesday, complaining that his peace talks with Russia’s Vladimir Putin were not going “anywhere.” (OLESYA KURPYAYEVA/AFP via Getty Images) · OLESYA KURPYAYEVA via Getty Images
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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