The spread of coronavirus and its impact on global oil prices could create additional risks throughout the marine transport industry
(All information in this article is current as of its publication on February 18, 2020 by Bloomberg)
The novel coronavirus (Covid-19) is already threatening oil markets, having greatly affected China’s industrial production levels and, consequently, its oil importing requirements.
The fear of less demand — from China and eventually globally as the economic impact widens — has sent crude oil to its lowest price in more than a year.
China is the largest oil importer in the world by far. In December it imported nearly 11 million barrels per day — about 10% of total global oil production — according to China’s General Administration of Customs. Its oil demand has since dropped by about three million barrels a day, or 20% of total consumption.
This is affecting the global energy market, with sales of some crudes slowing to a crawl and benchmark prices in free fall. Sales of Latin American oil cargoes to China recently halted, while sales of West African crude, a traditional source for
Chinese refineries, have also slowed down.
These changes are increasingly reflected in the oil trading markets, with the futures market once again moving into a “contango” state, raising concerns in the marine
(Marine Insurance Weekly Round Up 30th March 2020 of Marsh Vietnam)
Business and Production Dep. - SBIC