(Bloomberg) — Oil held steady near 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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West Texas Intermediate was little changed to trade near $58 a barrel after earlier rising by as much as 1.4%. India’s oil refiners said they expect to reduce — not stop — the purchase of Russian crude, a move that could squeeze global supply, following remarks by Trump that the South Asian nation would halt all buying. Still, the market is awaiting clarification on the situation from the government in New Delhi, which didn’t officially confirm or deny Trump’s remarks.
The development took some air out of the earlier rally, with traders newly assured that the halt to India’s imports of Moscow’s crude won’t be immediate. The South Asian country, 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.
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.
–With assistance from Grant Smith.
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