Oil prices climb on hopes of U.S.-India trade breakthrough

October 22, 2025 (MLN): Oil prices extended gains on Wednesday, climbing for a second straight session, as optimism grew over a potential trade agreement between the United States and India that could reshape global crude flows.

Brent crude futures went up by $0.99, or 1.61%, to $62.31 per barrel.

West Texas Intermediate (WTI) crude futures decreased by $0.95, or 1.66%, to $58.19 per barrel by [4:05 pm] PST.

Analysts said the prospect of a deal between Washington and New Delhi raised hopes of stronger demand for non-Russian oil grades.

“Oil prices climbed after reports suggested the U.S. and India are close to finalising a trade deal that could see India gradually cut imports of Russian crude, potentially lifting demand for other grades,” said Soojin Kim, analyst at MUFG.

U.S. President Donald Trump told reporters he spoke with Indian Prime Minister Narendra Modi on Tuesday, noting that Modi assured him India would scale back its purchases of Russian oil.

According to Mint newspaper, the two nations are nearing a breakthrough on a long-delayed trade pact that would see U.S. tariffs on Indian goods lowered to 15–16% from the current 50%, signaling progress after years of stalled talks.

Investors are also monitoring U.S.-China trade developments, with negotiators from both sides scheduled to meet this week in Malaysia.

Trump earlier expressed optimism about reaching a “fair trade deal” with Chinese President Xi Jinping during a planned meeting in South Korea next week, though he later cast doubt on whether the meeting would take place.

Adding to bullish sentiment, supply concerns resurfaced after reports that a planned summit between Trump and Russian President Vladimir Putin had been postponed.

Western governments have also intensified pressure on Asian buyers to reduce imports of Russian crude, heightening fears of supply disruptions.

Further supporting prices, U.S. oil inventories posted a decline last week. Market sources, citing data from the American Petroleum Institute (API), said crude, gasoline, and distillate stocks all fell.

In a separate development, the U.S. Department of Energy revealed plans to purchase one million barrels of crude oil for the Strategic Petroleum Reserve (SPR), aiming to take advantage of relatively low prices to rebuild national reserves.

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