Oil slides on fresh COVID-19 curbs in China

Oil prices fell on Tuesday as fresh COVID-19 curbs in China, the world’s biggest crude importer, and fears of a global economic slowdown weighed on the outlook for fuel demand.

Brent crude futures for September traded $1.81, or 1.7%, lower at $105.29 a barrel by 06:33 GMT, while U.S. West Texas Intermediate (WTI) crude for August delivery was at $102.14 a barrel, down $1.95, or 1.9%.

Multiple Chinese cities are adopting fresh COVID-19 curbs, from business halts to lockdowns, to rein in new infections as the highly infectious BA.5.2.1 subvariant appears in the country.

Western sanctions on Russia over the war in Ukraine, which Russia calls a “special military operation”, have disrupted trade flows for crude and fuel.

Oil prices also fell as worries of a disruption at the Caspian Pipeline Consortium’s system (CPC) eased after a Russian court on July 11 overturned an earlier ruling suspending operations at the pipeline for 30 days.

However, traders and analysts remain fearful that Russia will suspend the pipeline, which carries oil from Kazakhstan to the Black Sea. Suspension could disrupt 1 per cent of global crude supply.