ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon Print

China's shutdown puts OPEC and allies nations in awkward position

They want to prop up price despite coronavirus-related drop in Asian demand

| China
Zhoushan crude oil import terminal, pictured in August 2018: no one anticipated a sudden demand shock caused by a new pathogen spreading like wildfire.   © TPG/Getty Images

The coronavirus epidemic battering economic activity and oil demand in China has sent oil prices into a tailspin. It has also placed producers of the OPEC/non-OPEC alliance in a quandary that puts their core ideology -- maintaining the price of crude oil so that it works for both producers and consumers -- to the test.

Major oil-producing countries and companies have been gradually adjusting to the reality of declining global demand in the mid- to long term. The cooling of China's red-hot economy over the past decade, latterly accelerated by its trade war with the U.S., and expectations of oil being displaced by environment-friendly energy and mobility alternatives have all pointed in that direction.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Discover the all new Nikkei Asia app

  • Take your reading anywhere with offline reading functions
  • Never miss a story with breaking news alerts
  • Customize your reading experience

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more