The corona pandemic is a wakeup call for Middle Eastern businesses for reminding them how much they hinge on China for business. The human activity across the country of 1.3 billion shuts down while authorities race to contain the outbreak. UAE being the top trading partner and Abu Dhabi being top crude oil suppliers to Beijing has crashed into yet another bear market on fears that the coronavirus outbreak will destroy demand in China. The consumption has fallen around 20% or 3 million barrels per day.
Andy Lipow, president of Lipow Oil Associates claimed that, in a worst-case scenario, oil demand is expected to plunge by 2.6 million barrels per day in February and 2 million barrels in March.
Gold, majorly used as indemnity against economic jeopardy, has a propensity to appreciate on expectations of reduced interest rates, which reduces the opportunity cost of holding non-yielding bullion. Now, coming at the height of tourist season for the Gulf, The UAE sees the highest volume of Chinese tourists anywhere in the Middle East. 6% of its total tourism or one in every 16 visitors to the UAE is from China. According to CEIC Data, nearly 2.4 million Chinese visitors travelled across the Middle East last year, comprising 2.7% of the region’s total of 91 million tourists.
In short, finance experts say it’s too soon to calculate the scale of the virus hit on global or Middle Eastern business.