The coronavirus situation is not expected to keep China from fulfilling its pledge to buy more U.S. energy products under the phase-one trade deal between the two countries, according to Energy Secretary Dan Brouillette.
Asked if the situation will impact those purchase commitments, Brouillette said, “It is hard to tell. I do not have any expectations at the moment that it will.” He added he thinks “the Chinese have every intention of honoring their agreements.” While the U.S. could see some impact on overall energy demand, he reiterated “there is no expectation that someone is not going to honor their agreements.”
He made the comments at a briefing with International Energy Agency (IEA) Executive Director Fatih Birol who noted the group has “revised” its global oil demand expectations “significantly.” Since China accounted for 80% of demand growth for crude oil last year, Birol noted their economic downturn will have an outsized impact on oil demand expectations.
"Coronavirus is affecting oil markets disproportionately more seriously than the global economy,” he observed. As for U.S. shale oil production, Brouillette said it was too soon to tell if there will be a significant impact.
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