Global financial markets have been rocked by concerns about interest rate hikes and broader lockdowns in China.
Oil prices sank 4 percent on Monday along with stocks as continued coronavirus lockdowns in China, the top oil importer, sparked demand concerns.
Brent crude fell 4.47 dollars, or 4 percent, to 107.92 dollars a barrel by 23:14 EDT (1514 GMT). US West Texas Intermediate crude fell, or 4.3 percent, $4.67 to $105.10 a barrel. Both contracts have earned more than 35 percent so far this year.
Global financial markets have been spooked by concerns about interest rate hikes and recession concerns as tighter and broader COVID-19 lockdowns in China led to slower export growth. in the world’s No. 2 economy in April.
“The COVID lockdowns in China are negatively impacting the oil market, which is selling off along with stocks,” said Andrew Lipow, president of Lipow Oil Associated in Houston.
China’s crude oil imports in the first four months of 2022 fell 4.8 percent from a year earlier, but April imports rose nearly 7 percent.
Iranian oil imports from China in April surpassed peak volumes seen in late 2021 and early 2022 as demand from independent refiners weakened after COVID-19 lockdowns hit fuel margins and surged. lower-priced Russian oil imports.
Wall Street stock indices fell and the dollar hit a 20-year high, making oil more expensive for holders of other currencies.
Saudi Arabia, the world’s top oil exporter, lowered crude prices for Asia and Europe in June.
In Russia, oil production rose in early May from April and output has stabilized, Deputy Prime Minister Alexander Novak said, after output fell in April as Western countries imposed sanctions over the Ukraine crisis.
EU Russia oil embargo
Last week, the European Commission proposed a gradual embargo on Russian oil, boosting Brent and WTI prices for the second week in a row. The proposal needs a unanimous vote of EU members this week to be approved.
The European Commission is considering offering landlocked Eastern European Union states more money to upgrade oil infrastructure in a bid to convince them to agree, an EU source told the Reuters news agency.
Japan, the top five crude importers, will ban imports of Russian crude “in principle”, Prime Minister Fumio Kishida said, adding that this would take time.