Business
Crude Oil Prices Surge as Ukraine Peace Prospects Wane

Crude oil prices are poised for a weekly rebound as market concerns grow over the potential for peace in Ukraine. Following a series of unmet demands from both sides, prices have shown resilience, trading at $67.63 per barrel for Brent crude and $63.51 per barrel for West Texas Intermediate (WTI) as of this morning. While these figures reflect a slight dip from Thursday’s close, they indicate a notable increase over the week.
Commodity analysts at ING have highlighted that the diminishing likelihood of a ceasefire may lead to tougher sanctions on Russia. According to their assessment, “The less likely a ceasefire looks, the more likely the risk of tougher sanctions.” Such sanctions are expected to have bullish implications for oil prices in the near term, particularly following the implementation of U.S. secondary tariffs on India for its ongoing purchases of Russian oil.
Should these tariffs deter India from acquiring Russian crude, and if Russia is unable to redirect this supply to other markets, domestic production levels may have to decline. As noted by Warren Patterson and Ewa Manthey of ING, “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, they caution that this could be less of a factor if India continues its current purchasing practices.
When former President Donald Trump initially threatened India with secondary tariffs, the Indian government adopted a steadfast position. Despite this, Indian refiners temporarily reduced their purchases of Russian oil. Recently, however, state refiners in India have returned to the spot market, capitalizing on deepening discounts for Russian crude grades, which have reportedly reached as much as $3 per barrel.
Earlier this week, reports surfaced indicating that Russia had proposed a “special mechanism” to India to maintain the oil trade. While specific details of this mechanism remain undisclosed, Indian officials have signaled a willingness to continue purchasing Russian crude, provided it remains financially advantageous. India’s ambassador to Russia, Vinay Kumar, stated that buying Russian oil will be contingent on “the financial benefit,” emphasizing, “India buys what is best for itself.”
As the international community monitors the evolving situation, the interplay between geopolitical tensions and oil prices will likely remain a focal point for analysts and investors alike. The implications of these developments extend beyond immediate market reactions, affecting broader economic landscapes across multiple nations.
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