Oil sank Monday on Chinese demand fears, in the past release of strategic reserves, and dimming hope of a European embargo on Russian supplies in the wake of the Ukraine war.

In midday deals, US benchmark oil West Texas Intermediate dived as low as $92.93 per barrel and European Brent hit $97.57.

“It is above all the bad news from China that is weighing on prices, as the number of Covid cases continues to surge,” said Commerzbank analyst Barbara Lambrecht.

“The lockdowns that are slowing oil demand in the world’s second-largest consumer country threaten to persist for even longer.”

Shanghai eased restrictions on some neighborhoods on Monday after mounting outcry over China’s inflexible Covid-19 rules that locked down 25 million people and sparked fears over energy demand.

Rich countries will meanwhile tap an additional 120 million barrels of oil from emergency reserves in a bid to calm prices that had soared on Russia’s invasion of Ukraine, the International Energy Agency said last week.

The move included Washington’s recent announcement of the release of 60 million barrels.

“Oil prices are heading lower as traders continue weighing up the strategic reserves releases and cooling demand in China,” added City Index Fiona Cincotta on Monday.

“The steady drip of … reserves is going some way to calming supply fears and plugging some of the Russian supply absent from the market.”

Kyiv wants the European Union to agree with sanctions on Russian oil and gas in retaliation for Moscow’s attack on Ukraine.

Such a move could share prices rebounding higher from current price levels, analysts warn.

“Oil is likely to settle around these levels unless, of course, the EU decides to ban Russian oil imports,” Cincotta.

“That would be the catalyst to send oil prices higher soaring once again.”

Oil rocketed close to $140 per barrel in early March following Moscow’s assault on Ukraine.

Russia is a crude supplier largely and a key member of the OPEC+ grouping of global producers.