Insights 
VT 
India and the US are nearing a trade agreement to reduce Indian oil imports from Russia. In September, India imported approximately 1.6 million barrels of crude oil daily from Russia, according to the IEA. Bloomberg’s data from October shows a decline, with shipments to India falling below 1 million barrels per day.
Sanctions by the US on Russia’s major oil firms could further decrease India’s imports. If Russia struggles to attract new buyers, demand for non-Russian oil might rise, which would help control the oversupply in the oil market.
Rising Oil Prices
These conditions could cause oil prices to rise, as seen in a recent 5% price increase. The impact of this oversupply could moderate any drastic price jumps. Additionally, if China reduces its crude oil purchases from Russia, the dynamics may shift. Reports indicate that Chinese state-owned refineries have temporarily halted seaborne oil purchases from Russia.
A potential agreement between the US and India to curb Russian oil imports is a major development we are watching closely. We’ve already seen Indian imports from Russia drop from 1.6 million barrels per day in September to below 1 million this month. This shift suggests a real-time realignment of global energy flows is underway.
Yesterday’s 5% price jump, which pushed Brent crude futures above $85 per barrel, shows the market’s sensitivity to this news. The spike in uncertainty has sent the CBOE Crude Oil Volatility Index (OVX) to its highest level since July, signaling that we should prepare for bigger price swings. This environment makes options strategies more compelling for traders looking to hedge or speculate.
The sanctions recently imposed by the Trump administration are the primary catalyst, effectively forcing a reduction in shipments to key buyers like India. If Russia cannot quickly find alternative markets, demand for non-Russian grades will rise, tightening that segment of the market. This creates a clear, near-term bullish case for long positions in Brent or WTI futures contracts.
Market Dynamics
However, we must balance this against signs of a looming oversupply in the broader market, which will likely cap any sustained rally. The latest EIA report out this week showed another build in U.S. crude inventories, and reports indicate that several OPEC+ members exceeded their production quotas last month. This underlying weakness could limit upside, suggesting that selling call options at higher strike prices might be a prudent strategy to collect premium.
We saw a similar scenario play out in the late 2010s with the sanctions on Iranian oil, which rerouted global trade and created profitable opportunities in price spreads. Traders should now closely monitor the spread between Russian Urals crude and Dated Brent. A significant widening of this spread seems likely as Russian sellers are forced to offer deeper discounts to attract the few remaining buyers.
The situation with China remains a critical variable, as Chinese state-owned refiners have reportedly paused new seaborne purchases from Russia for now. Any confirmation of a sustained reduction from China would significantly amplify the impact of India’s pullback. This would remove the largest buyer of Russian crude and could trigger another sharp leg up in prices for alternative grades.
