Why Crude Oil Prices Could Spike Shortly
India’s Oil Dilemma:
India, the world’s third-largest oil importer, relies on external sources for nearly 90% of its needs. Over the past two years, it has been one of the biggest beneficiaries of discounted Russian crude, buying barrels at rates cheaper than those from the Middle East. However, U.S. pressure has been mounting. Washington recently imposed steep tariffs—up to 50%—on Indian goods, explicitly linking them to India’s heavy reliance on Russian supplies.
Reports from Reuters and Bloomberg suggest that Indian officials have floated the idea of reducing Russian oil imports if the U.S. eases sanctions on alternatives such as Iranian and Venezuelan crude. Yet no firm decision has been taken, and Indian ministers continue to stress that “we will buy Russian oil wherever it suits us best.” This indicates that while India may be keeping its options open, it is not prepared to cut ties with Moscow unless viable substitutes emerge.
Even so, logistical complications are growing. U.S. sanctions have already forced tankers carrying Russian oil to divert away from Indian ports, adding delays and costs. The European Union, meanwhile, has shown a more flexible stance, allowing some Russian flows to India, underscoring the policy divergence between Brussels and Washington. If Indian imports from Russia fall significantly without immediate replacement, global supply could tighten by as much as 1–2 million barrels per day, exerting upward pressure on prices.
Ukraine’s Drone Offensive:
The second major factor is unfolding thousands of miles away. Since August 2025, Ukraine has stepped up its drone campaign against Russian refineries, striking at least 16 of the country’s 38 major facilities. These attacks have disabled more than 1 million barrels per day of refining capacity, according to reports from the Financial Times and energy research firms.
Strikes on refineries such as Afipsky, Salavat, Saratov, and Kirishi have caused repeated fires and forced shutdowns. The consequence has been clear: Russian diesel exports have fallen to multi-year lows, and even domestic fuel shortages have started to appear in some regions. Russia’s pipeline monopoly, Transneft, has warned that crude shipments could face disruptions if damage to export infrastructure continues. In a further escalation, Ukrainian drones recently targeted pumping stations on the Druzhba pipeline, one of Russia’s key arteries for oil flows to Europe.
These blows mean that even if Russian oil output remains steady on paper, the ability to refine and export it effectively has been sharply reduced. As more barrels pile up in storage or are rerouted at deeper discounts, the global seaborne market tightens, particularly for India and China, who are among the largest buyers.
The Market Backdrop:
Overlaying these disruptions is a market that, until now, has leaned bearish. OPEC+ recently announced a modest output increase of 137,000 barrels per day starting in October, a move seen as prioritizing market share over price stability. Global supply, according to the International Energy Agency, is expected to rise by 2.7 million barrels per day this year, far outpacing demand growth of only 700,000 barrels. Inventories in the U.S. remain high, even after a small recent draw, and many traders expect further softness in prices.
Yet this complacency could prove fragile. Russia’s seaborne shipments have already slipped to a four-week low of around 2.7 million barrels per day. At the same time, the risks of additional Ukrainian strikes or further U.S. sanctions loom large. When a market builds a narrative of oversupply but is suddenly confronted with supply losses, the price reaction is often sharp and disorderly.
Why a Spike Is Credible:
Taken together, India’s potential recalibration and Ukraine’s sustained attacks create a powerful mix. Between disrupted refining capacity in Russia and the possibility of reduced Indian intake of Russian crude, as much as 2–3 million barrels per day of discounted supply could effectively be taken off the market. Non-OPEC producers, including U.S. shale drillers, cannot instantly bridge this gap, especially if lower prices discourage drilling activity.
History shows how quickly energy markets can turn. In early 2022, when Russia invaded Ukraine, Brent surged from $100 to $130 within weeks. Today, with winter demand approaching and refinery maintenance season underway, the stage is set for volatility. Geopolitical risk premiums of $10–15 per barrel could re-enter the market at very short notice.
Final Thoughts:
Crude oil prices in the final quarter of 2025 will hinge on whether diplomacy prevails or disruption escalates. India’s bargaining with Washington, Ukraine’s drone campaign, and OPEC’s production strategy will all determine the direction of travel. For now, the balance of risks suggests that a price spike is not only possible but increasingly probable.
In such an environment, investors, policymakers, and consumers alike should prepare for sudden moves. Oil may not remain at $69 for long—the horizon looks anything but calm.
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