Global oil demand is recovering…
Aramco CEO Amin Nasser said…
OPEC producer Kuwait has excluded oil tankers from a ban on ships departing or arriving from several countries in a bid to reduce the risk of coronavirus spreading, Reuters reported on Wednesday, quoting a notice from the authorities it has seen.
Kuwait, a major oil exporter from the Middle East, is sparing oil tankers from a ban that covers foreign ships traveling to or arriving from China, South Korea, Italy, Singapore, Thailand, Hong Kong, and Iraq.
As of Wednesday, Kuwait had reported 25 cases of coronavirus infections, after confirming 13 new infections today, and all new cases were of people infected after visiting Iran, Gulf News reported.
Despite the ban on ships to and from the countries with most infections, oil tankers are still allowed to dock and depart in Kuwait, so oil trade with Kuwait is safe for now.
The coronavirus outbreak, however, is destroying oil demand in China and in the wider Asian region, and Middle Eastern oil exporters are suffering, as the demand loss increases the oversupply in an already oversupplied oil market.
Due to the lower crude oil demand in China, Middle Eastern oil exporters are asking other Asian customers if they could accommodate more crude oil cargoes under the term contracts, five sources familiar with the matter told Reuters earlier this month. The crude marketing companies of OPEC producers Iraq and Kuwait have asked Asian buyers if they would be willing and able to buy more oil for loading in March, the sources told Reuters, in a sign that the Middle Eastern oil producers are grappling with growing oversupply amid the slump in Chinese crude oil demand.
Fears of a global economic slowdown due to the spreading of the virus outside Asia are also battering oil prices, which hit budget revenues of the oil suppliers in the Middle East.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.