Virus highlights OPEC reliance on Chinese oil demand
London: Fears of an economic slowdown, fuelled by the coronavirus slashing output in China, has shone the spotlight on OPEC, whose oil is heavily bought by the world’s second-biggest economy.
“China has become increasingly important for OPEC countries in recent years,” research group JBC Energy told AFP.
In total, more than two-thirds of China’s crude imports come from the Organization of Petroleum Exporting Countries and Russia.
Following a slump in prices, OPEC and its key oil-producing ally Russia have been meeting this week to discuss the situation. In an apparent sign of the difficulties involved, OPEC delegates meeting in Vienna announced that the talks would continue on Thursday.
However, it is not a formal meeting on output, as was the case in December when OPEC and its OPEC+ allies extended an existing agreement to curb crude production to prop up prices.
OPEC kingpin Saudi Arabia and Russia are the biggest foreign suppliers of crude to China.
But as a whole, OPEC would be seriously affected by a slump in Chinese oil demand.
Despite oil prices rebounding strongly on Wednesday, they have fallen heavily overall during the past couple of weeks on fears of a China-fuelled global economic slowdown. The price falls have raised eyebrows at OPEC, whose 13 member nations pump out around one-third of global crude and are anxious to safeguard revenues, faced with weaker Chinese demand. – AFP