Oil prices rise; Trump says India will stop Russian oil buying

Investing.com-- Oil prices rose Thursday, as expectations of tighter supplies were buoyed by U.S. President Donald Trump stating that India agreed to stop buying oil from Russia. 

At 08:30 ET (12:30 GMT), Brent oil futures rose 0.6% to $62.25 a barrel and West Texas Intermediate crude futures rose 0.6% to $58.60 a barrel.

Both contracts had slumped to five-month lows earlier this week. 

India to stop buying Russian oil - Trump 

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. 

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. 

U.S. crude inventories rose last week - API 

Numbers overnight from the American Petroleum Institute showed that U.S. crude oil inventories increased for a third straight week by 7.36 million barrels over the last week, in contrast to the average market expectation of a draw of 136,000 barrels.

Looking at refined products, gasoline inventories rose by 3 million barrels, while distillate stocks declined by 4.8 million barrels.

"The decline in distillate inventories provided mixed signals on energy consumption in the country. The more widely followed EIA weekly inventory report will be released later today," said analysts at ING, in a note.

U.S.-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. 

Ambar Warrick contributed to this article