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RIYADH: Oil prices fell on Wednesday on concerns that rising COVID-19 cases in China, the world’s top oil importer, will disrupt its economic recovery and fuel demand growth as it unwinds its pandemic restrictions.
Brent futures for February delivery fell 66 cents or 0.78 percent, to $83.67 a barrel, by 01.20 p.m. Saudi time, while US crude fell 53 cents, or 0.67 percent, to $79.00 per barrel.
Both benchmarks fell by over $1 per barrel earlier in the session after rising to their highest in three weeks on Tuesday on hopes of a fuel demand boost.
China said it will stop requiring inbound travelers to go into quarantine starting from Jan. 8, a major step toward relaxing stringent curbs on its borders.
Putin bans Russian oil exports to countries that implement price cap
Russian President Vladimir Putin on Tuesday delivered a long-awaited response to a Western price cap, signing a decree that bans the supply of crude oil and oil products from Feb. 1 for five months to nations that abide by the cap.
The Group of Seven major powers, the European Union and Australia agreed this month to a $60-per-barrel price cap on Russian seaborne crude oil effective from Dec. 5 over Moscow’s “special military operation” in Ukraine.
The cap is close to the current price for Russian oil, but well beneath the windfall price Russia was able to sell for this year, which helped offset the impact of financial sanctions on Moscow.
Russia is the world’s second-largest oil exporter after Saudi Arabia, and a major disruption to its sales would have far-reaching consequences for global energy supplies.
The decree, published on a government portal and the Kremlin website, was presented as a direct response to “actions that are unfriendly and contradictory to international law by the US and foreign states and international organizations joining them.”
“Deliveries of Russian oil and oil products to foreign entities and individuals are banned, on the condition that in the contracts for these supplies, the use of a maximum price fixing mechanism is directly or indirectly envisaged,” the decree stated, referring specifically to the US and other foreign states that have imposed the price cap. “The established ban applies to all stages of supply up to the end buyer.”
Egypt launches new bid round for oil and gas exploration
Egypt has set a new international tender for oil and gas exploration rights in the Nile Delta and Mediterranean Sea, state news agency reported on Tuesday.
The tender was set for 12 blocks, split evenly between onshore and offshore, and the deadline for offers in the bid round was set for April 30, 2023, the tender announcement showed.
(With input from Reuters)