Oil prices remained steady, advancing slightly on Wednesday, despite Russia halting natural gas supplies to Poland and Bulgaria.
Investors assessed weakening demand outlook amid lockdowns in China against potential curbs on Russian energy exports by the EU.
Brent, the global benchmark for two thirds of the world's oil, was trading 0.65 per cent higher at $105.67 per barrel at 11.53am UAE time. West Texas Intermediate, the gauge that tracks US crude, was 0.43 per cent higher at $102.14 a barrel.
Oil prices rose sharply on Tuesday after two days of losses, with Brent gaining 2.6 per cent and WTI climbing more than 3 per cent.
“It seems that the weaponisation of its energy supplies by Russia has now begun, possibly driven by previously reluctant members of Nato getting on board and supplying heavy weapons to Ukraine,” Jeffrey Halley, senior market analyst, Asia Pacific at Oanda, said.
“If this is just the start of further energy escalation by Russia, the EU faces challenging times ahead. That likely explains why oil prices only reversed their losses from Monday and didn’t shoot into space.”
Moscow on Wednesday stopped natural gas supplies to Poland and Bulgaria in a major escalation with western allies that are supporting Ukraine with arms, defence systems and financial aid in its war against Russia.
Russia has asked for energy supply payments to be made in roubles, a demand European allies rejected. However, with payment deadlines now approaching for European nations, it remains to be seen how the 27-member bloc, which is heavily dependent on Russian oil and gas imports, will react to Moscow’s move.
The situation could worsen from here, Daniel Richards, Middle East and North Africa economist at Emirates NBD, said.
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UN Secretary General Antonio Guterres visits Borodyanka, near Kyiv, where Russian forces are accused of killing civilians. AFP -
Children play in the wreckage of a Russian armoured vehicle in Lukashivka, Chernihiv region, northern Ukraine. The village has been retaken by Ukrainian forces. EPA -
A cyclist passes a destroyed building in Derhachi village, near besieged city Kharkiv, in north-eastern Ukraine. AFP -
Burnt-out wreckage of a tank in Kolychivka village, Chernihiv region, northern Ukraine. EPA -
A Ukrainian flag flies in a park in Kramatorsk, Donetsk region, eastern Ukraine. A rocket attack on the city railway station earlier in April killed at least 50 people. AFP -
Russian President Vladimir Putin addresses a meeting of MPs in St Petersburg. EPA -
Youngsters Faddei and Oleksandr play in front of a church damaged during Russia's invasion of Ukraine, in the Chernihiv region. Reuters -
A demonstrator turns emotional as she attends a rally in Kyiv demanding a humanitarian corridor to rescue civilians from Mariupol. Reuters -
A Ukrainian Sukhoi Su-25 releases decoy flares as it provides air support to Ukrainian ground forces near central city of Yampil. AFP -
An officer from National Guard of Ukraine surveys weapons left behind by Russian troops in Chernobyl. AFP -
Mr Putin attends a meeting with UN Secretary General Antonio Guterres in Moscow. Reuters -
Members of a team from the International Atomic Energy Agency carry equipment as they arrive at the Chernobyl nuclear power plant, in Chernobyl, Ukraine. AP -
Ukrainian troops fire rockets from the city of Popasna, near Luhansk. EPA -
Lithuanian musician Darius Mazintas plays a piano in front of the Central House of Culture destroyed during Russia's invasion, in the town of Irpin, outside Kyiv. Reuters -
Ukrainian refugees Julia, second left, 32, and Miroslava, left, 11, walk away with relatives who received them after they crossed into Poland from Ukraine at the Dorohusk border. AFP -
Russian Foreign Minister Sergey Lavrov meets Mr Guterres in Moscow. AFP -
US Chairman of the Joint Chiefs of Staff Gen Mark Milley, left, US Secretary of Defence Lloyd Austin, second left, and Ukrainian Minister of Defence Oleksii Reznikov, right, attend the Ukraine Security Consultative Group meeting at Ramstein airbase in Ramstein-Miesenbach, Germany. Getty Images -
Smoke rises from an oil terminal hit by fire in Bryansk, Russia. AP -
People take pictures by the wreckage of a Russian military vehicle, in the village of Rusaniv, Kyiv region. Reuters -
Smoke rises above the Azovstal Iron and Steel Works plant amid fighting in Mariupol, Ukraine. Reuters -
People carry a large Ukrainian flag as they attend a rally to mark the 77th anniversary of Liberation Day in Milan, Italy. The day remembers Italians who fought against the Nazis and Mussolini's troops during the Second World War. EPA -
A Ukrainian soldier looks at a Russian ballistic missile's booster stage that fell in a field in Bohodarove, eastern Ukraine. AFP -
People watch as a residential building burns after Russian bombardment in Kharkiv, Ukraine. AP -
Ukraine's President Volodymyr Zelenskyy meets US Secretary of State Antony Blinken and US Defence Secretary Lloyd Austin. Reuters -
Russian President Vladimir Putin attends the Orthodox Easter service at the Cathedral of Christ the Saviour in Moscow. EPA -
A young girl in front of people carrying a huge Ukrainian flag during a peaceful demonstration entitled 'Solidarity with Ukraine' in Krakow, Poland. Reuters -
A boy stands next to a wrecked vehicle in front of an apartment damaged during the conflict in the southern port city of Mariupol. Reuters -
This satellite image from Planet Labs PBC shows damage at the Azovstal steelworks in Mariupol, Ukraine. AP -
A Ukrainian man rides in front of a destroyed building in Kharkiv which had been shelled by the Russians. EPA -
A Ukrainian Territorial Defence fighter in a shelter with an Easter Cake near Kharkiv. Ukrainians mark Orthodox Easter today. EPA -
Residents receive Easter cakes and apples handed out by pro-Russian troops on Easter Day at the Svyato-Troitsky Church in the southern port city of Mariupol. Reuters -
A woman photographs the scene of yesterday's shelling in the southern Ukraine city of Odesa. Eight people were killed, including a three-month child, and about 20 were wounded. EPA -
A military chaplain blesses Ukrainian soldiers on the occasion of Orthodox Easter not far from the city of Izyum in Kharkiv. EPA -
An internally displaced man walks with dogs in the Palace of Culture, which was damaged by shelling in Rubizhne, eastern Ukraine. AFP -
Tulips grow next to a building destroyed by shelling in Rubizhne. AFP -
Internally displaced people wait to receive food inside a factory that has been turned into a shelter, in Severodonetsk. AFP -
Members of the Ukrainian Red Cross carry a woman, 92, to an ambulance from a bunker at a factory in Severodonetsk. AFP -
Ambulance workers move an injured Ukrainian serviceman to a hospital in Donetsk. AP -
A woman sits inside a subway station that has been turned into a shelter, on the outskirts of second largest Ukrainian city, Kharkiv. AFP -
Residents shelter in a subway station in Kharkiv. AFP -
Anastasiya Kryvoho attends a candlelight vigil for Ukraine on the Orthodox Holy Saturday, in Toronto, Canada. Reuters -
Ukrainian President Volodymyr Zelenskyy addresses a press conference with international media in an underground metro station in Kyiv. AFP -
Firefighters work at the scene of a fire after shelling in Kharkiv, Ukraine. EPA -
A family from Myrne, a town occupied by Russian forces, wait to register with police at an evacuation point for people fleeing from Mariupol, Melitopol and surrounding towns. Getty Images -
Oleksandr, 25, meets his parents Olga, 49, and Oleksandr, 50, who fled from the Russian-occupied village of Lyubimivka, at the evacuation point in Zaporizhzhia. EPA -
Residents walk near a damaged military vehicle in an area controlled by Russian-backed separatist forces in Mariupol. AP -
A heavily damaged apartment building in Horenka. Getty Images -
Residents wrapped in blankets stand near their houses damaged by Russian shelling in Odesa. AP -
A Ukrainian flag is installed on top of a gob pile in Lysychans, eastern Ukraine. AFP -
A Ukrainian soldier rests at a checkpoint in Severodonetsk. AFP
“As Russia has now effectively made its energy exports a political tool, in stopping gas flows to Bulgaria and Poland, fears will spread that they may follow with oil exports to the eurozone, adding more tightening pressure to markets,” Mr Richards said.
Oil prices have declined in recent weeks amid concerns for demand outlook and co-ordinated efforts by the US and the International Energy Agency to improve supply.
Crude prices, which rose close to $140 per barrel last month after the US banned Russian energy imports and the UK said it would phase out its purchase of Moscow's oil, have given up most gains. However, they could rise sharply as the EU considers widening sanctions to include Russian oil and gas exports.
China, the world’s second-largest economy and biggest crude importer, is experiencing a wave of Covid-19 infections and has introduced strict movement curbs in Shanghai, its largest city, to control the spread of coronavirus.
New cases have also been detected in China’s capital Beijing as the government continues to carry out mass testing to isolate every infected person as part of its “zero-Covid” strategy.
“Oil prices seem destined to range in a wide … choppy range,” Mr Halley said. “Russia concerns rightly supporting dips, while China's slowdown fears cap gains with lots of noise in between.”
