Mar 6, 2020 - Energy & Environment

How China is driving the plunging demand for oil amid coronavirus slowdown

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Data: IEA; Chart: Axios Visuals

A big reason the novel coronavirus-fueled economic slowdown is hammering oil demand is because China — the center of the outbreak — has grown into such a powerhouse petroleum consumer.

What they're saying: The International Energy Agency's executive director Fatih Birol said China's slowdown is a key reason why the organization is slated to announce a major downward revision in this year's global oil demand estimates next week. Last year China accounted for 80% of total global oil demand growth, he said.

Go deeper: The global scramble to contain the coronavirus

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OPEC-Russia oil price war escalates as Saudi Aramco announces supply increase

Data: Money.net; Chart: Andrew Witherspoon/Axios

The new oil price war escalated Tuesday as Saudi state oil giant Aramco announced, per reports in Reuters and elsewhere, that it plans to supply the market with 12.3 million barrels per day starting next month.

Why it matters: The increase underscores how the lunge for market share with the collapse of the OPEC+ agreement is going to create financial pain and problems for producers and governments worldwide.

Oil plunges and industry pain spreads

Photo: Carsten Rehder/picture alliance via Getty Images

This morning is bringing fresh and stark signs of how economic contraction from COVID-19 is crushing the oil market and forcing companies to cut back.

The big picture: The price collapse stems from COVID-19 freezing a significant amount of travel and economic activity, and the collapse of the Saudi-Russia agreement to limit production.

The fallout from oil's collapse

Data: Yahoo Finance; Chart: Axios Visuals

ExxonMobil, citing an "unprecedented environment," said last night that it plans to "significantly" cut spending in light of the coronavirus and the collapse in oil prices.

Why it matters: The oil giant's announcement is the latest sign of how deeply the upended market is affecting the sector.