Wuhan Coronavirus: The Bear Stalks Global Energy Markets?

Central Command Area of Responsibility (Jun. 29, 2003) -- Commercial oil tanker AbQaiq readies itself to receive oil at Mīnā' al-Bakr Oil Terminal (MABOT), an off shore Iraqi oil installation. The supertanker AbQaiq is the first commercial vessel to receive exported Iraqi oil as an off shore customer since 1991, outside of the United Nations' Oil-for-Food programme. AbQaiq is scheduled to take on an estimated 2 million barrels of crude oil. U.S. Navy and coalition forces are helping to provide security, enforcing an exclusionary perimeter around the terminal. U.S. Navy photo by Photographer's Mate 2nd Class Andrew M. Meyers. (RELEASED) - https://uz.wikipedia.org/wiki/Fayl:Tanker_offshore_terminal.jpg


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.

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