The offers are another sign of the impact the deadly virus is having on commodity trade flows, as measures to contain the epidemic weigh on economic activity, travel and energy consumption. China’s oil demand has dropped by about 3 million barrels a day, or 20% of total consumption, prompting refineries to scale back production as their storage tanks fill up.
SINGAPORE (Feb 5): Oil sellers are looking for alternative buyers in Asia for prompt cargoes as Chinese demand dries up because of the coronavirus and some customers ask to defer purchases.
The suppliers – including oil majors and trading houses – are offering grades including Russia’s ESPO, Basrah Light from Iraq and Brazilian Lula for delivery in just a few weeks time, according to traders in Asia with knowledge of the matter. This is unusual because the cargoes would typically have traded several weeks ago and already be en route to their destinations.
