NEW YORK, NY: Oil prices fell 4% on Monday, along with the stock market, as continued coronavirus lockdowns in China, the world’s largest oil importer, raised demand fears.

At 11:14 p.m. EDT, Brent crude was down $4.47, or 4%, to $107.92 per barrel (1514 GMT). US West Texas Intermediate crude slid $4.67 to $105.10 per barrel, or 4.3 percent. So far this year, both contracts have gained over 35%.

Concerns about interest rate hikes and recession fears have rattled global financial markets, as stricter and wider COVID-19 lockdowns in China resulted in reduced export growth in April.

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“The COVID lockdowns in China are having a detrimental influence on the oil market, which is selling off in tandem with the stock market,” Andrew Lipow, president of Lipow Oil Associated, said.

China’s crude imports declined 4.8 percent year over year in the first four months of 2022, but were up over 7 percent in April.

In April, China’s Iranian oil imports fell short of peak levels expected in late 2021 and early 2022, as demand from independent refiners deteriorated as fuel margins were slashed by COVID-19 lockdowns, as well as rising imports of lower-cost Russian oil.

Oil became more expensive for holders of other currencies as Wall Street stock indexes plummeted and the dollar achieved a two-decade high.

In June, Saudi Arabia, the world’s largest oil exporter, cut crude prices for Asia and Europe.

After falling in April as Western countries applied sanctions over the Ukraine issue, Russian oil output rebounded in early May and production stabilised, according to Deputy Prime Minister Alexander Novak.

Oil embargo between the EU and Russia
The European Commission recommended a phased ban on Russian oil last week, causing Brent and WTI prices to rise for the second week in a row. This week, EU members must vote unanimously to approve the idea.

According to Reuters, the European Commission is considering handing landlocked Eastern European Union nations additional money to repair oil infrastructure in order to persuade them to comply.

Prime Minister Fumio Kishida said Japan, which is among the top five crude importers, will restrict Russian crude imports “in principle.”