Brent oil futures fell 2.6% to $74.31 per barrel in early Asian trade. Meanwhile, West Texas Intermediate crude futures plunged 2.4% to $81.69 a barrel. Both contracts advanced sharp drops from last week and were trading at their lowest level since early January.
Civil turmoil started in several major Chinese cities over the weekend. Many civilians were brought to the streets to voice dissatisfaction with the country’s strict zero-coronavirus policy.
The protests arrive in the wake of new coronavirus-related constraints presented over the past two months as China grapples with record-high daily infections. This has also hammered crude markets with the possibility of cutting demand in the world’s biggest oil importer.
The country’s crude imports have dropped steadily this year, displaying few signs of recovery. Expanded oil export percentages in the country also suggest that local consumption stays fragile.
China in Disruption
The current protests also mark a rare display of civil noncompliance rarely witnessed in China since President Xi Jinping took power over a decade ago. His administration’s insistence on a strict zero-coronavirus policy has stalled economic growth this year, and data is expected to show a further contraction later this week.
Major importers China and India also stress crude prices, purchasing heavily overlooked crude from Russia. At the same time, Western nations struggle to set a price cap on Moscow’s oil exports.
On the supply side, the emphasis is now on an impending conference of OPEC+.
