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Brent jumped to trade above $65 a barrel, and its 7% rebound over the past two days is now the steepest in more than two years.

The blacklisting of Russian oil giants Rosneft PJSC and Lukoil PJSC comes against a backdrop of growing concerns with excess supplies as the OPEC+ alliance, which Russia co-leads with Saudi Arabia, ramps up output. Senior refinery executives in India, a key buyer of Russian oil, said the restrictions would make it impossible for those flows to continue.

“It is a big deal,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “It may force a shift in the recent supply glut narrative, forcing traders to adjust their positions back to neutral or even bullish.”

The European Union meanwhile piled additional pressure on the Kremlin, adopting a new package of sanctions targeting Russia’s energy infrastructure.

The amount of crude on oil tankers at sea has already risen to a record and the International Energy Agency expects world oil supply will exceed demand by almost 4 million barrels a day next year.

But while plentiful supplies may cushion the impact of these sanctions, they shouldn’t be underestimated. Rearranging India’s imports — of which more than a third come from Russia — would be a huge task. The move is also sending shockwaves through China’s oil industry, which imports as much as 20% of its crude from Russia.

To be sure, Russia has plenty of experience in skirting sanctions and their ultimate impact isn’t yet clear. the country’s seaborne crude shipments recently hit a 29-month high despite a slew of western restrictions. The Rosneft-backed Indian refinery Nayara Energy, for instance, could remain an outlet for the country’s barrels.

But the penalties “mark a shift in President Trump’s approach to Russia and open the door for tougher sanctions down the road, which could ultimately impact Russian oil flows,” said Warren Patterson, the head of commodities strategy for ING Groep NV in Singapore. “The uncertainty is how effective these sanctions will be and what impact they actually have” on exports, he added.

The message from Indian refiners that they won’t be able to buy Russian crude anymore is a significant shift from a recent signal that they would keep importing, albeit at reduced volumes. On Tuesday, Trump said India’s Prime Minister Narendra Modi assured him that the country would wind down its purchases.

Following the measures, Trump said he planned to speak to Chinese President Xi Jinping about the nation’s buying of Russian oil at a planned meeting next week in South Korea.

Rosneft, headed by Putin’s close ally Igor Sechin, and privately held Lukoil are the two largest Russian oil producers, jointly accounting for nearly a half of the nation’s total exports, according to Bloomberg estimates. Taxes from the oil and gas industries account for about a quarter of the federal budget.

The US measures are a radical change of policy, where previous efforts included a Group-of-Seven price cap on Russian oil that sought to limit revenue for the Kremlin without disrupting supply and causing a spike in global prices.

Brent has bounced back from a five-month low reached on Monday. Futures rebounded on Wednesday on signs the latest selloff was overdone and as US inventories shrunk.

--With assistance from Weilun Soon.