Riyadh: On Tuesday, oil fell slightly on expectations that further interest rate hikes in the United States, the world's largest oil user, would slow economic growth and limit fuel demand.

By 8.55 a.m. Saudi time, Brent futures for March delivery had fallen 43 cents to $79.22 per barrel, a 0.54 percent drop. West Texas Intermediate crude in the United States fell 34 cents, or 0.46 percent, to $74.29 per barrel.

Both benchmarks rose 1% on Monday after China, the world's largest oil importer and second-largest consumer, opened its borders for the first time in three years over the weekend.

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Per the two sources with knowledge of the matter and documents reviewed by Reuters on Monday, China issued a second batch of 2023 crude oil import quotas, increasing the total for this year by 20% compared to the same time last year.

In accordance with the Ministry of Commerce document, 44 companies, mostly independent refiners, were granted 111.82 million tonnes of import quotas in this round.

When combined with the 20 million tonnes granted to 21 refineries in October, the total for this year is 131.82 million tonnes.

China, the world's largest oil importer, has allocated some 2023 quotas earlier than usual in order to boost the sluggish economy by encouraging refiners to expand operations.

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According to the documents, Zhejiang Petrochemical Corp., which operates China's largest privately-owned refinery site, was granted the largest quota of this batch at 20 million tonnes, the same as last year's issuance.

Hengli Petrochemical received a 14 million tonne quota, while Shenghong Petrochemical's newly opened 320,000 barrels-per-day refinery received an 8 million tonne quota. In the first batch in October, Hengli won a quota of 4.83 million tonnes.

Frontline, an oil tanker company, announced on Monday that it had terminated a $4.2 billion merger agreement with rival Euronav, which would have created the world's largest publicly traded tanker company.

Frontline said in a statement that it will no longer seek a listing on Euronext Brussels and will not make a voluntary conditional exchange offer for the shares of Belgian oil tanker and storage operator Euronav.

"We regret that we were unable to complete the merger as planned in July 2022, as this would have resulted in the creation of the world's largest publicly traded tanker company," CEO Lars Barstad said.

The two companies announced the agreement last year, with the goal of forming a market-leading oil tanker group with 146 vessels. Euronav's proposed merger had received "a clear signal" from shareholders.

However, since the announcement of the planned merger, Euronav has been at odds with its largest shareholder, Compagnie Maritime Belge, which has attempted to stymie it.

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The combined company was expected to have a market capitalization of more than $4 billion, with annual synergies of at least $60 million.

Euronav reported its first quarterly net profit since 2020 in November, with core earnings more than ten times higher than a year ago, owing to an accelerated recovery in large tanker freight rates.