While all oil consuming nations generally stand to gain from the crash, China is perhaps among the best placed. Unlike the US, which is now both the top consumer and producer, the oil industry doesn’t account for such a sizable piece of economic output, jobs and debt, all of which are threatened by the price tumble.
(Mar 25): As the US finds itself in the unfamiliar position of lobbying for higher oil prices, China’s enjoying what amounts to a major rebate from crude’s crash just as it tries to recover from the coronavirus.
The world’s biggest oil importer is saving about US$250 million ($363 million) a day after crude prices crashed this year amid dual demand and supply shocks. It’s coming at an opportune time for its economy, which is expected to post the slowest growth since the end of the Mao era. Should low prices last, benefits could include a boost in consumer spending, a stronger trade balance and less stress on currency reserves, as well as a source of cheap supplies for its strategic reserves.
