The virus outbreak may have implications for the tanker market. Image Credit: File Image / Pixabay
The coronavirus outbreak in China and its spread to other Asian countries may cause "short-term headwinds" for the tanker market, according to consultancy Poten & Partners.
"The SARS epidemic in 2003 pushed oil prices down nearly 20% and created significant fear and uncertainty," the company said in a research note Thursday.
"The fear ultimately subsided as the pace of new reported cases slowed.
"The recovery of economic activity and oil demand was swift and strong.
"If the current crisis follows a similar pattern, we may see short-term headwinds followed by a strong rebound later this year."
The fact that the size of the Chinese economy has ballooned since 2003 means the impact of this outbreak on tanker markets has the potential to be larger than that of the SARS epidemic if it spreads further, the consultancy said.
"The oil market has already traded down as concerns about the coronavirus are mounting and although the tanker market remains strong, rates have started to weaken in recent days," the company said.