The price of brent crude oil fell 6% to $101 per barrel in early morning trading on Tuesday.
The sharp dive comes as the impact of China’s lockdown on Shenzhen sent Asian markets into a spiral, with the Hang Seng plummeting 5% overnight as a result of fears around a COVID outbreak and China’s involvement in the Ukraine crisis.
The blow to the market served as a reminder that the Covid-19 pandemic is not yet over, and the prospect of future lockdowns might still arise across the UK in time.
Diplomatic talks between Russia and Ukraine have also served to ease supply fears, with optimism on the rise that the two countries might find a solution to the conflict.
The news follows the commodity’s rapid climb to $139 per barrel on 6 March, as Russia’s assault on Ukraine pushed the UK to cut ties with Putin’s resources and seek alternative supplies for oil reserves.
Analysts highlighted the impact of the news, with John Kilduff, partner at Again Capital telling CNBC: “We have a demand scare for the first time in a while.”
“The Covid lockdown in China has spooked the market.”
