World oil prices surged 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 5.1 percent to $65.75 per barrel while West Texas Intermediate was up 5.2 percent at $61.53.
Trump announced Wednesday 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 sanctions, unveiled by the US Treasury, mark a dramatic U-turn by Trump, who said only last week that he and Putin would hold a summit in Budapest to try to end the war in Ukraine.
But in his latest turnaround on the conflict, Trump said on Wednesday the planned summit was off because he did not believe it would achieve the outcome he wanted and complained that his many "good conversations" with Putin did not "go anywhere.”
Scott Bessent, the US Treasury Secretary, made clear Washington stood ready to take further action and was targeting Russia's ability to fund a war it launched in February 2022.
"Given President Putin’s refusal to end this senseless war, Treasury is sanctioning Russia’s two largest oil companies that fund the Kremlin’s war machine," Bessent said in a statement. "We encourage our allies to join us in and adhere to these sanctions."