London (AFP) – Oil prices jumped more than five percent Thursday after US President Donald Trump targeted Russia’s key oil industry with new sanctions in a bid to end the war in Ukraine. The international benchmark contract, Brent North Sea crude, jumped 5.4 percent while West Texas Intermediate was up 5.7 percent.
Trump on Wednesday announced new sanctions against Russia’s two largest oil companies, Rosneft and Lukoil, saying his peace talks with President Vladimir Putin were not going “anywhere”. The move was joined by another round of punishments by the European Union as part of attempts to pressure Moscow to end its three-and-a-half-year invasion of Ukraine. “These new sanctions are likely to have a real impact,” said Arne Lohmann Rasmussen, an analyst at Global Risk Management.
Russia’s foreign ministry warned that the sanctions risked jeopardising diplomatic efforts to end the Ukraine war, and that it had developed a “strong immunity” to them. Trump had resisted imposing new restrictions against Moscow for months, but his patience snapped after plans for a new summit with Putin in Budapest collapsed. He had already claimed that India agreed to cut its Russian oil purchases as part of a US trade deal, something New Delhi has not confirmed. Bloomberg on Thursday cited unnamed Indian refinery sources as saying flows of Russian crude were expected to plunge almost to zero as a result of the US sanctions. “As Rosneft and Lukoil produce around four million barrels per day between them, if India were to reduce its purchases, that would severely hamper Russia’s ability to fund its war,” said Trade Nation analyst David Morrison.
Trump in August raised tariffs on Indian exports to the United States to 50 percent, with Trump’s aides accusing India of fuelling Russia’s war in Ukraine. Elsewhere Thursday, major stock markets diverged as traders assessed US-China trade prospects and another batch of mixed company earnings. Beijing said it would hold tariff talks with Washington from Friday, tempering trade fears over reports of potential US curbs on software exports to China.
Wall Street opened more or less flat, but shares in Tesla skidded more than five percent lower. Elon Musk’s electric car company reported a hefty drop in profits after trading ended on Wednesday, citing a drag from US tariffs and other expenses that offset increased sales. Gold, seen as a safe haven, recovered from recent heavy selling to rise more than one percent to around $4,100 an ounce, though still well below the record high above $4,381 touched earlier this week.
– Key figures at around 1330 GMT –
Brent North Sea Crude: UP 5.4 percent at $65.97 per barrel
West Texas Intermediate: UP 5.7 percent at $61.85 per barrel
New York – Dow: FLAT at 46,585.25 points
New York – S&P 500: UP less than 0.1 percent at 6,705.72
New York – Nasdaq Composite: UP less than 0.1 percent at 22,751.74
London – FTSE 100: UP 0.7 percent at 9,580.89
Paris – CAC 40: UP 0.6 percent at 8,253.23
Frankfurt – DAX: DOWN less than 0.1 percent at 24,132.05
Tokyo – Nikkei 225: DOWN 1.4 percent at 48,641.61 (close)
Hong Kong – Hang Seng Index: UP 0.7 percent at 25,967.98 (close)
Shanghai – Composite: UP 0.2 percent at 3,922.41 (close)
Euro/dollar: DOWN at $1.1605 from $1.1606 on Wednesday
Pound/dollar: DOWN at $1.3347 from $1.3356
Dollar/yen: UP at 152.56 from 151.99 yen
Euro/pound: UP at 86.95 pence from 86.90 pence
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© 2024 AFP
