Oil is falling due to fears of the closure in China

Oil prices fell more than $2 a barrel on Monday, following a second consecutive weekly decline after countries announced plans to withdraw record amounts of crude and petroleum products from their strategic stocks and as lockdowns continued in China.

Brent crude fell $2.05, or 2.0 percent, to $100.73 a barrel by 0620 GMT, while US West Texas Intermediate crude fell $2.17, or 2.2 percent, to $96.09.

Brent crude fell 1.5 percent last week, while US oil fell one percent. Over the past weeks, the two benchmarks have been subject to the most volatility since June 2020.

The market is closely watching developments in China, where authorities have kept Shanghai, a city of 26 million people, closed under a “zero tolerance” policy for COVID-19. China is the world’s largest oil importer.

IEA member states will release 60 million barrels over the next six months, along with a similar amount from the United States as part of the 180 million barrel withdrawal it announced in March. The move aims to compensate for the shortage of Russian crude after Moscow was subjected to severe sanctions in the wake of its invasion of Ukraine.

However, it is not clear whether this will fully compensate for the Russian oil shortage as exports continue, as India has increased its imports after being tempted by deep cuts.