The Wuhan coronavirus is shuttering factories and stymieing economic activity in Asia as millions of people stay home either by choice or government order. Clearly the shutdown is most pervasive in China’s Hubei province, where the outbreak originated, and where tens of millions of people will remain at home while many of their fellow citizens return to work on Monday.
Yet in today’s highly interconnected economy, the fallout won’t restrict itself to Hubei, or even China. This is particularly true of energy markets; China is, of course, the largest energy consumer in the world in absolute terms, accounting for some 54% of Asia’s consumption (seven times that of Japan in 2018).
Put another way, when China coughs, global energy suppliers get sick – and early indications suggest that this could be a nasty bug indeed.