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Oil prices surged over 5% on Thursday to a two-week high as new sanctions targeting major Russian energy producers heightened concerns over potential supply disruptions. 

Brent crude futures rose $3.40, or 5.4%, to settle at $65.99 a barrel. 

West Texas Intermediate gained $3.27, or 5.6%, to $61.79. Both benchmarks rebounded from five-month lows earlier in the week as traders reassessed near-term supply risks amid persistent oversupply concerns.

The sanctions, imposed by the US, EU, and UK, include bans on Russian energy imports and financial transactions with key producers. Analysts said the measures could limit flows to Asia and complicate trade logistics, tightening availability in the near term even as global inventories remain elevated.

India, a major importer of Russian crude, is expected to adjust sourcing strategies, while uncertainty remains over potential Chinese imports. Market observers noted that these shifts could temporarily disrupt regional trade flows and support prompt demand.

The International Energy Agency continues to project a global surplus next year, with tanker data showing record crude volumes at sea. However, the sanctions have contributed to a return of backwardation in the futures curve, signalling tighter short-term fundamentals.

Written: Aiman Haikal