Oil prices climbed on Thursday as the Group of Seven (G7) advanced economies unveiled plans to target countries purchasing Russian crude, signaling increased pressure on Moscow’s key revenue streams.
Brent crude traded at $65.46 per barrel, up from $65.32, while US benchmark West Texas Intermediate (WTI) rose 0.25% to $61.77 from $61.61. The gains followed investor reactions to both a larger-than-expected US crude stock build and fresh signals that the G7 intends to tighten sanctions on Russian oil exports.
“Now is the time to maximise pressure on Russia’s oil exports, a major source of their revenue,” the G7 finance ministers said after a virtual meeting on Wednesday. “We will target those who are continuing to increase their purchase of Russian oil since the invasion of Ukraine and those that are facilitating circumvention.”
The ministers outlined plans to phase out remaining Russian hydrocarbon imports, consider restrictions on refined products, and impose penalties on countries aiding Moscow’s war effort. They said further measures will be discussed during the IMF and World Bank meetings in Washington on October 15. Traders say the prospect of tougher sanctions has added support to oil prices, as global supply disruptions remain a key concern.
Geopolitical tensions, particularly unrest in the Middle East, continue to affect supply, while demand dynamics shift as China shows slower consumption and India maintains its oil deal with Russia despite US sanctions.
Meanwhile, US crude inventories increased by 1.8 million barrels last week to 416.5 million, according to the Energy Information Administration’s Weekly Petroleum Status Report, surpassing forecasts of a 1.5 million-barrel rise. The larger-than-expected build suggested weaker refining activity and softer demand, tempering price gains after recent losses. Strategic petroleum reserves grew by 700,000 barrels to 406.7 million, and gasoline inventories added 4.1 million barrels to 220.7 million.
Investors are also eyeing the OPEC+ meeting on October 5, where Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman are expected to set production levels for November, adding another layer of uncertainty to the market outlook.
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