The fast spread of the new coronavirus strain has been reminding the economies of Middle East in addition to the other economies about their reliance on China in terms of business and human activity as a country which has a population of 1.3 billion is shutting down as the authorities have been racing for the containment of the outbreak.
The prices of oil have been undergoing a major depression for many months as they have been weighed down by the buoyant supply in America and the ongoing trade wars. The new epidemic of the Coronavirus has been causing further damage as it has killed over 600 people and also made 31,000 people fall sick and that has been plunging the demand for oil in these countries.
China has huge demand for oil and has been the main buyer for all of these gulf states and this demand has off late has been down by a significant margin as the consumption falls by close to 20% or around 3 million barrels every day as per the reports and estimates.
Any period which shows an extended fall of demand is going to further put pressure on the market of oil as per the reports on Wednesday. Saudi Arabia in itself has been the biggest producer of crude oil in OPEC as it exported as much as 1.8 million barrels per day for the demand in China in the summer last year. The expectations are now on China for their March contract as they will see how much this level is going to drop and what action Saudi is going to take in response to that dropped level.