Asian oil refiners’ margins have slumped to the lowest in nearly five months amid worries that the Omicron coronavirus variant could deal another blow to oil demand recovery, already hit by rising COVID-19 cases in Europe.
Governments worldwide imposed travel curbs on travellers from southern Africa during the weekend to limit the spread of Omicron, first detected in South Africa. Scientists are racing to find out whether it is more transmissible or causes more severe disease than existing variants.
It comes as refiners’ margins in Asia and Europe had already taken a hit in recent weeks as many European countries reimposed coronavirus restrictions to contain surging COVID-19 cases.
The double-whammy risks derailing the global economic recovery and by extension oil demand, which the International Energy Agency expects to grow by 5.5 million barrels per day (bpd) to 96.3 million bpd in 2021.
“At a time when many travel lanes are reopening, this is a setback,” said Howie Lee, an economist at Singapore’s OCBC bank.