Oil climbs after US adviser's statements on India's Russian oil purchases

Oil prices rose on Monday after White House trade adviser Peter Navarro said that India’s purchases of Russian crude are financing Moscow’s war in Ukraine and must stop.

Traders were also awaiting signals from a later meeting on the same day between US President Donald Trump and Ukrainian President Volodymyr Zelensky, in an attempt to reach a peace agreement that would end the bloodiest war in Europe in 80 years.

Brent crude futures rose by 0.46% or 30 cents to $66.15 a barrel as of 10:05 GMT, while US West Texas Intermediate crude climbed 38 cents or 0.61% to $63.18 a barrel.

Navarro’s comments that India’s purchases of Russian crude finance Moscow’s war in Ukraine revived concerns over supply flows. Navarro said: “India is acting as a global clearing house for Russian oil, converting sanctioned crude into high-value exports, while handing Moscow the dollars it needs.”

Olle Hvalbye, an analyst at SEB, said that this statement sparked some buying interest in the market.

Priyanka Sachdeva, senior market analyst at brokerage firm Phillip Nova, added: “The sharp remarks from the US adviser on India’s oil imports from Russia, along with the delay in trade talks, have revived concerns that energy flows remain hostage to trade and diplomatic tensions, even as the prospects for peace in Ukraine improve.”

Trump is scheduled to meet Zelensky first at 17:15 GMT, then meet all European leaders at 19:00 GMT.

Trump told Ukraine on Monday that it must abandon hopes of regaining Crimea, which Russia annexed, or of joining NATO, as he appeared closer to Moscow in seeking a peace deal rather than a ceasefire first, following his meeting with Russian President Vladimir Putin in Alaska on Friday.

Ole Hansen, head of commodity strategy at Saxo Bank, said: “I don’t think the oil market has fully priced in the potential ‘peace dividend,’ which could lead to further setbacks in crude and European gas prices.”

Hansen added that speculators, in the week ending August 12, held the first-ever joint net short position in West Texas Intermediate crude (across both CME and ICE exchanges), leaving prices exposed to any bullish surprises.

Investors are also closely watching Federal Reserve Chair Jerome Powell’s remarks at the Jackson Hole meeting this week, regarding the path of US interest rate cuts, which could push stocks to record highs.