The oil market is under pressure as crude oil became significantly cheaper on Monday. The reason lies mainly in China’s strict crown policy. A gradual oil embargo by the G7 countries is taken for granted.
Oil prices fell sharply on Monday. At noon, a barrel (159 liters) of North Sea Brent cost $ 110.51. It was $ 1.91 cheaper than on Friday. The price of a barrel of the US West Texas Intermediate (WTI) variety fell $ 2.17 to $ 107.60.
Oil markets barely reacted to the news that the G7 countries had agreed on a phased import ban on Russian crude. “However, most of the G7 countries had already taken this step,” explained Carsten Fritsch, commodity expert at Commerzbank.
A corresponding ban is currently being drafted in the EU, but this has met with resistance in individual countries. Apparently, the speech of the Kremlin boss Vladimir Putin has calmed things down a bit. He has not officially declared war on Ukraine, nor has he ordered general mobilization. This was feared by some observers.
China’s no Covid policy puts pressure on the oil market
Meanwhile, Fritsch referred to Saudi Arabia’s decision. The major oil producing country lowered its official Asian selling prices over the weekend. The burden on the oil market comes mainly from China, as the People’s Republic is still taking particularly stringent measures against the spread of the corona virus.
The one-week curfew in the metropolises of millions of people is putting a strain on the national economy. China is the second largest economy in the world and one of the largest consumers of oil.