Brazil's Petrobras has suspended all employee travel to China because of the coronavirus outbreak that has reportedly already entered Brazil itself. Reuters reports that the country's health ministry said?
Brazil's Petrobras has suspended all employee travel to China because of the coronavirus outbreak that has reportedly already entered Brazil itself.
Reuters reports that the country's health ministry said there were nine suspected cases, and advised locals to refrain from traveling to China.
Petrobras, for its part, said that while employee travel will be suspended, shipments of oil to China will continue.
The coronavirus, which originated in the Chinese city of Wuhan in December, has spread across more than a dozen countries and has infected more that 6,000 people. The death toll is rising, too, with the latest figure at 160.
The outbreak has shaken commodity markets with a particularly hard impact on oil prices. Investment banks warned of a sizeable downside risk for benchmarks from the outbreak, which could?and most probably would?affect China's economic growth and hence its oil demand.
The impact is already being felt after the institution of quarantines at a time of the year that normally sees increased passenger traffic during the Lunar New Year holidays. With people now obliged to stay at home, this travel is simply not happening.
If oil demand does weaken for an extended period of time, Brazil will be among the most affected suppliers of crude to China. The bulk of Petrobras' oil exports during the first nine months of 2019 were bound for China, Argus Media writes, citing company data. That was 72 percent of the almost half a million bpd Petrobras shipped abroad.
Purchases for January and February stand at over 500,000 bpd as the light and medium oil pumped from the Lula field in the presalt zone has become a favored feedstock among independent Chinese refiners.
?For the export of oil to this country, there are no changes in the schedule and possible logistical adjustments are being studied,? Petrobras told Argus.
By Irina Slav for Oilprice.com
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