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We’ve been up, down, trying to get that feeling again, and President Trump is just not feeling it but oil prices sure are. President Donald Trump decided to hit Russia’s largest oil companies, Rosneft and Lukoil, hard along with their subsidiaries, to pressure Moscow into agreeing to a ceasefire in Ukraine and stop the killing. That sent oil prices soaring, now up almost 6%. 

On the timing and decision to impose the sanctions President Trump said that, “I just felt it was time, we’ve waited a long time.”In Russia they’re going to feel the pain because these sanctions could cripple the Russian economy.At the same time, the President offered that he hoped that these sanctions would be temporary because he knows that if they are not and are enforced, we could see the price of oil rise by $5 to $10 a barrel.

This is a major sanction escalation as they’re going to freeze any U.S.-based assets and stop American companies from doing business with Russia’s giants. President Trump, speaking right there in the Oval Office with NATO Secretary General Mark Rutte, didn’t hold back his frustration. He wants these peace talks to move, and he’s pushing hard for a quick solution. Talking about his canceled meeting with President Putin, Trump laid it out: “It just didn’t feel right to me. It didn’t feel like we were going to get to the place we have to get. So I canceled it, but we’ll do it in the future.” The impatience is clear. He went on, “Every time I speak with Vladimir, I have good conversations, and then they don’t go anywhere. They just don’t go anywhere.” And as for these sanctions? Trump’s hoping they won’t have to last long—he’s clearly eager to see progress and has his eye on a resolution sooner rather than later.

Treasury Secretary Scott Bessent has also actively encouraged allied nations to participate in the sanctions and signaled that additional measures may be forthcoming.

Regarding the rationale behind these actions, Secretary Bessent identified President Putin’s ongoing involvement in the conflict as the principal motivating factor. He referenced the newly imposed sanctions targeting Russia’s two largest oil companies, emphasizing their connection to financial support for the Russian government.

Secretary Bessent further clarified that these measures are designed to exert economic pressure on Russia’s energy sector, thereby restricting its capacity to generate revenue for continued military operations and affecting the broader Russian economy. Secretary Bessent stated, “We encourage our allies to join us in and adhere to these sanctions.” He also indicated the Treasury’s readiness to implement further actions if necessary, in support of President Trump’s initiative to bring an end to the conflict. In a broader appeal, Secretary Bessent called upon Russia to “stop the killing” and agree to an immediate ceasefire. These sanctions will have a major impact and will shake up the global oil market.

China’s oil industry will face major pressure as the new restrictions on Russia’s major energy firms force both state and private refineries to find ways to maintain supply without facing penalties.

Over in India, even though officials claim they’ll cut back, the numbers tell a different story. India is on track to import a staggering 93 million metric tons (about 684 million barrels) of Russian oil in 2025, averaging a jaw-dropping 1.87 million barrels every single day! Between January and September 2025 alone, Indian imports hit 71 million tons (519 million barrels), making up a massive 40% of Russia’s total crude exports. According to The Financial Times, India’s biggest refiner, Reliance, says it’s going to ‘recalibrate’ Russian oil purchases, but the pressure from Washington to stop buying Russian crude is intense!

China, meanwhile, depends on Russia for up to 20% of its oil imports, making Russia a powerhouse supplier for fuels like diesel and gasoline. But here’s the catch—any Chinese company doing business with sanctioned Russian entities could face serious consequences, like getting locked out of Western banking, losing access to US dollars, or being shunned by the world’s major producers, traders, shippers, and insurers. Only two European countries—both EU members—continue direct imports of Russian crude oil, primarily via pipeline. These imports total around €1-1.2 billion monthly for the EU as a whole, with Hungary and Slovakia accounting for the vast majority (over 90%). Other EU countries import Russian liquefied natural gas (LNG) or refined products indirectly, but not crude oil.

This comes the day after we saw very bullish report from the Energy Information Administration that showed no signs of the so-called oil glut. Contrary to the skeptics who warned of weakening demand and oversupply, the latest data paints a very different picture.

U.S. petroleum demand has surged back above 20.5 million barrels per day, defying predictions of a slowdown. Additionally, U.S. commercial crude oil inventories fell by 1.0 million barrels to 422.8 million—about 4% below the five-year average, signaling tightening supplies rather than a glut. Motor gasoline inventories also dropped by 2.1 million barrels, remaining slightly below the five-year average, with finished gasoline stocks rising even as blending components declined. Meanwhile, distillate fuel inventories decreased by 1.5 million barrels, and although still above average, they are now about 7% below typical levels. These figures demonstrate that the fears of oversupply and sagging demand were misplaced—demand remains robust and inventories are tightening, reinforcing the bullish outlook for the oil market.

Now add to that the sanctions and that is why we felt that oil and products were extremely unvalued, especially compared to all other asset classes. Yet the key is whether the sanctions are enforced and how well Russia can avoid the sanctions like they have in the past.

Natural gas may get some back door support, but weather is still going to drive it.

Fox Weather is reporting that tropical Storm Melissa forecast to become Category 4 hurricane dumping flooding rain on Jamaica, Hispaniola Tropical Storm Melissa, which had been dubbed Invest 98L, formed on Tuesday. And while the organizing storm system is currently maintaining its strength, forecasters with the National Hurricane Center (NHC) said Melissa could become a hurricane by Friday and intensify into a Category 4 hurricane with 130-mph winds by Tuesday.

The EIA releases its report today and According to a Reuters poll, U.S. energy firms likely added 81 billion cubic feet (bcf) of natural gas to storage last week, surpassing the 79 bcf added a year ago and the five-year average of 77 bcf. The previous week saw an 80 bcf addition. If accurate, this would bring total stockpiles to 3.802 trillion cubic feet—0.7% higher than the same period last year and 4.3% above the five-year average.

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