• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Wind droughts
  • 24 hours "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 3 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 10 hours "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 3 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 10 days "Forget Oil, The Real Crisis Is Diesel Inventories: The US Has Just 25 Days Left" by Zero Hedge - 5 Stars *****
  • 3 days The Federal Reserve and Money...Aspects which are not widely known
  • 1 day "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 7 days Is Europe heading for winter of discontent with extensive gas shortages?
  • 3 days "Dodgy Demand Data? The Oil Price Collapse Conspiracy" by Alex Kimani
  • 10 days "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 11 days Goldman Betting on Cryptocurrencies
  • 14 days Сryptocurrency predictions
China's Extraordinary Covid Protests

China's Extraordinary Covid Protests

Extraordinary protests across China appear…

Energy Stocks Are A Big Buy Right Now

Energy Stocks Are A Big Buy Right Now

Oil prices are currently down…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Oil Prices Drop As China Initiates Biggest Covid Lockdown In 2 Years

  • Brent crude falls to $112 handle on new Shanghai lockdown.
  • UBS: disruptions have affected some 2 million barrels daily of Russian crude.
  • Kpler data: exports of Russian crude by sea fell to the lowest in eight months in the week to March 25.

Crude oil prices started the week with a decline in response to the start of a lockdown in Shanghai due to the high number of Covid infections, rekindling concern about the loss of oil demand in the world's largest importer.

This morning, Brent crude had slipped to $112 per barrel, Reuters reported earlier today, before rebounding somewhat.

On the other hand, a shortage of Russian gas, prompted by traders' reaction to Western sanctions against Moscow, served to keep oil at over $100 and will likely continue keeping it there for the observable future unless there is a change in the sanction regime.

The Wall Street Journal reported that we are only beginning to see the first effects of the sanction boomerang now, since oil deals canceled at the start of the Russian invasion of Ukraine would have had delivery dates last week.

The report cited data from Kpler saying that exports of Russian crude by sea fell to the lowest in eight months in the week to March 25.

It also cited data from UBS, which has estimated that disruptions have affected some 2 million barrels daily of Russian crude. According to the International Energy Agency, this could reach 3 million barrels daily by April.

"Commodities tend to price in the now, not the future," Giovanni Staunovo, a commodity analyst at UBS, said, as quoted by the WSJ. "We are starting to see some disruption in the volumes of both crude oil and products from Russia. If we get more disruptions going forward, the price will react even more." 

On the other hand, the Shanghai lockdown is certainly bad news for oil.

"Shanghai's lockdown prompted a fresh sell-off from disappointed investors as they expected such a lockdown would be avoided," according to Kazuhiko Saito, chief analyst of Fujitomi Securities Co., who spoke to Reuters.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News