Oil prices jumped ~3.5% in afternoon trading, extending gains to the highest levels in nearly three weeks as traders reacted to reports that Washington is weighing new sanctions on Russian energy exports and to a surprise draw in U.S. crude inventories.
Live market data show Brent crude trading around $63.40 a barrel, up 3.39%, as of Wednesday at 4:39 p.m. ET, and West Texas Intermediate (WTI) trading at $59.30, up roughly 3.60%. The late-session rally accelerated after reports that the U.S. administration is considering expanded restrictions on Russian crude and refined-product shipments, potentially tightening global supplies just as winter demand picks up.
According to Reuters, prices were already supported earlier in the day by news that the U.S. Energy Department plans to purchase one million barrels for the Strategic Petroleum Reserve and by unexpected draws in gasoline and distillate stocks, suggesting stronger-than-forecast domestic consumption. The Energy Information Administration (EIA) also showed overall U.S. crude inventories falling more than analysts anticipated.
Traders also cited speculation that Asian buyers may scale back Russian purchases if sanctions are expanded, redirecting more demand toward Middle Eastern and West African suppliers. That shift could strain shipping logistics and narrow available spot cargoes, amplifying the price reaction.
Still, analysts cautioned that the rally may prove fragile. The International Energy Agency (IEA) continues to forecast a global surplus through early 2026, with output growth from the U.S., Brazil, and Guyana expected to offset most geopolitical shocks. For now, however, markets are pricing in a risk premium tied to U.S. policy uncertainty and the prospect of constrained Russian supply.
Oil has rebounded roughly 8% this week, erasing much of October’s slump as investors refocus on geopolitics rather than fundamentals.
By Charles Kennedy for Oilprice.com
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