Crude oil prices extended gains earlier today, capping a week of volatility driven by geopolitical tensions, renewed sanctions pressure, and shifting dynamics in global energy trade.
The prospect of peace in Ukraine has dimmed as negotiations remain gridlocked, while India faces increasing strain over U.S. tariffs linked to its continued purchases of Russian oil.
At the time of writing, Brent crude was trading at $67.66 per barrel, while West Texas Intermediate stood at $63.54 per barrel. Though slightly down from Thursday’s close, both benchmarks remained higher than at the start of the week, setting the stage for a weekly rise.
Commodity analysts suggest that fading hopes of a ceasefire could fuel further price gains in the near term.
In a research note issued Friday morning, ING analysts highlighted the impact of potential sanctions escalation.
“The less likely a ceasefire looks, the more likely the risk of tougher sanctions.
“This would be bullish for oil in the near term, especially after the entry into effect of U.S. secondary tariffs on India for its continued purchases of Russian oil.”
ING’s Warren Patterson and Ewa Manthey
The ING team, led by Warren Patterson and Ewa Manthey, warned that sanctions could disrupt market balances depending on India’s next moves.
“If tariffs push India away from buying Russian oil, and Russia can’t divert this supply to other buyers, domestic producers would be forced to reduce supply.
“However, this is less of a concern if India continues with its Russian crude purchases.”
ING’s Warren Patterson and Ewa Manthey
India’s Balancing Act
India, the world’s third-largest oil importer, has found itself at the center of the latest energy standoff.
When U.S. President Donald Trump first announced plans to impose secondary tariffs on Indian exports in response to its Russian oil purchases, New Delhi struck a defiant tone.
Indian refiners initially cut back on Russian crude, but as discounts deepened, state-run companies quickly returned to the market.
Moscow’s flagship crude grades, such as Urals, have recently been sold at discounts of up to $3 per barrel, making them an attractive option for Indian refiners seeking to manage domestic fuel prices and curb inflation.
India’s ambassador to Russia Vinay Kumar said, “India buys what is best for itself,” in comments to Russian daily Investia. He added that continued purchases of Russian crude would depend “on the financial benefit.”
Kumar’s remarks reflect India’s long-standing policy of energy pragmatism, balancing economic imperatives with diplomatic pressures.
By continuing to source discounted Russian oil, India has sought to safeguard its energy security while navigating an increasingly complex geopolitical landscape.
Moscow’s “Special Mechanism”
Reports earlier this week revealed that Russia had proposed a “special mechanism” to India aimed at preserving the oil trade despite mounting U.S. sanctions.
Although details of the arrangement remain undisclosed, it underscores Moscow’s determination to maintain its foothold in one of Asia’s fastest-growing energy markets.
For Russia, India has become a critical outlet for its crude exports since the start of the Ukraine conflict and subsequent restrictions from Western buyers.
Bilateral trade between the two countries has surged, with crude oil forming the backbone of economic ties.
The uncertainty surrounding India’s purchases of Russian crude, combined with fading hopes of a Ukrainian ceasefire, has created bullish sentiment in oil markets. Traders remain wary, however, of sudden policy shifts or further tariff escalations.
While the U.S. tariffs are designed to punish India for its energy ties with Russia, analysts note that they also risk straining relations with one of Washington’s key strategic partners in Asia.
India, for its part, has reiterated that its energy policy will remain guided by affordability and security, regardless of external pressures.
As the week closes, attention turns to whether India will adjust its oil imports in response to U.S. tariffs or continue to deepen its partnership with Moscow.
For now, New Delhi appears determined to maintain flexibility, keeping all options open as it weighs short-term economic gains against long-term diplomatic costs.
With Brent crude holding above $67 per barrel, traders are bracing for more volatility. Much depends on whether the conflict in Ukraine intensifies further, whether U.S. sanctions tighten, and whether India can negotiate a path that preserves both its energy security and its global partnerships.
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