LONDON, Oct 23 — Oil prices surged more than 5 per cent today 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 per cent while West Texas Intermediate was up 5.6 per cent.

Trump yesterday 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 hurting 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 today 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.

Elsewhere today, 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.

Gold, seen as a safe haven, recovered from recent heavy selling to rise more than one per cent to around US$4,100 an ounce, though still well below the record high above US$4,381 touched earlier this week.

On the corporate front, investors will focus on Tesla’s share price when Wall Street opens after Elon Musk’s electric car company reported a hefty drop in profits yesterday, citing a drag from US tariffs and other expenses that offset increased sales. — AFP