Cyclone Amphan and COVID-19 Impact on Oil Recovery

Just last week, India was hit with the 1st cyclone of the season.  Cyclone Amphan struck West Bengal directly wiping out any structure within reach.  Amphan’s path of destruction included farmland, schools, businesses, and homes. 10 million people have been affected and 500,000 have lost their homes due to the cyclone.  This storm is especially unique because India has recently been on  “lockdown” of sorts due to the COVID-19 pandemic. A disaster like this is forcing the intermingling of people that have previously been practicing the social distancing concept to flatten the COVID-19 curve. 3 million people were successfully evacuated prior to the storm, but the balance would rather try to fight off mother nature instead of being confined in a small space.  It was a true case of “pick your poison”.

To combat the destruction from Amphan and COVID-19, there has been an increase in emergency response efforts which have led to a rise in oil consumption in India.  Since the emergency response has to cover the effects of COVID-19 as well as Amphan, the oil usage is set to return to pre-virus consumption.  As a result of the immediate increase in oil usage there is valid concern for how long the over supply will last.  Could this flip the script and lead to a potential shortage?  With hurricane season fast approaching the U.S., how long will the supply glut last?  With many refiners choosing to operate on lower staff count and voluntarily curtailing production, could the U.S. see supply shortages during hurricane season? 

 

https://oilprice.com/Latest-Energy-News/World-News/India-Sees-Fuel-Demand-Reaching-Pre-Virus-Levels-In-June.html

https://foreignpolicy.com/2020/05/21/first-pandemic-then-killer-cyclone-amphan-india-bangladesh-coronavirus/

https://www.nytimes.com/2020/05/21/world/asia/cyclone-amphan-india-bangladesh.html

https://news.sky.com/story/coronavirus-india-extends-lockdown-by-two-weeks-but-implements-zones-with-different-rules-11982191

 

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