Russia held its spot as China’s top oil supplier for a third month in July, data showed. Seen here is an oil pumping unit at Huabei oil field on the outskirts of Hejian city, Hebei province, China.
Guang Niu | Getty Images
Oil prices fell Monday as worries about China’s economy grow amid the liquidation of what was once one of the country’s largest property developers.
Brent futures fell $1.15, or 1.38%, to $82.40 a barrel. U.S. West Texas Intermediate dropped $1.15, or 1.56%, to $76.79 a barrel.
A court in Hong Kong on Monday ordered the liquidation of China Evergrande, the world’s most indebted property developer. China’s real estate sector faces a debt crisis that is weighing on the country’s economy, raising worries among traders that Beijing’s demand for crude could be softer as a result.
Oil prices rose more than 1% earlier in the trading session after missiles launched by Iran-backed militants killed U.S. troops in Jordan on the weekend. But anxiety in the oil market about China’s economy and crude production in North America have repeatedly overshadowed geopolitical tensions.
“People are trying to weigh up the economic news out of China – what are the potential implications for demand,” Helima Croft with RBC Capital Markets told CNBC’s “Worldwide Exchange” on Monday.
“There’s a corner of this market that believes that this is not going to escalate to Iran,” Croft said of the conflict in the Middle East. “But again, we are getting closer and closer to a wider war,” she said.
Three U.S. service members were killed and many injured in an unmanned aerial drone attack on forces stationed in a northeast Jordan outpost near the Syria border on Sunday, according to the White House.
They were the first American fatalities from enemy attacks since Israel’s war with Hamas began on Oct. 7.
“While we are still gathering the facts of this attack, we know it was carried out by radical Iran-backed militant groups operating in Syria and Iraq,” U.S. President Joe Biden said in a statement.
“Have no doubt — we will hold all those responsible to account at a time and in a manner our choosing,” he said.
Defense Secretary Lloyd Austin said Sunday that the Biden administration “will take all necessary actions to defend the United States, our troops, and our interests.”
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Oil prices in the past six months
The Islamic Resistance in Iraq claimed responsibility for the weekend drone attack on the Jordan-Syria border alongside attacks on two other bases, pledging support for the “steadfast Palestinian people in the Gaza Strip.”
The attack marked another escalation in the Middle East, where tensions have soared since Hamas launched on unprecedented terror attack on Oct. 7 against Israel that killed some 1,200 people. Israel declared war in response and its military operation in Gaza has killed more than 26,000 Palestinians.
“It’s a critical inflection point for the Biden administration because we really have to see whether he will have a serious escalatory response to this attack,” Croft told CNBC.
The deadly attack on U.S. troops comes on the heels of attacks by Yemen-based Houthi rebels on an oil tanker transiting the Red Sea on Friday. A petroleum products tanker vessel, operated on behalf of Trafigura, caught fire after it was struck by a missile in the Gulf of Aden.
