Bilkent Energy Notes

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A Virus to Kill Energy Demand: Coronavirus' Impact

A Virus to Kill Energy Demand: Coronavirus’ Impact

ENx

Enerji Talebini Öldüren Bir Virüs: Koronavirüs'ün Etkilri

TR

- Bilkent Energy Policy Research Center

- Bilkent Energy Policy Research Center

Abstract

As of February 18, there were nearly 73,337 confirmed Coronavirus cases and 1,875 deaths. A cruel death rate calculation is %2.5 percent. The estimates of Case Fatality Rates (CFR) range from 2.2% to 14%. The slowdown due to economic inactivity affects commodity demands. Since China has one of the major economies in the world, any shock in the country has global impacts. In this study, we investigate two sides of the epidemic: One of them is the asymmetric effect of such an outbreak on near term economic activities, prices, and expectations. These asymmetric effects can be an upward price movement of coal while oil prices dip to lower levels, also how the impact can be different between export-oriented and import oriented economies. The other is the long term chain of events resulting from such an epidemic. An economic recession triggered by an epidemic may increase unemployment, result in more marginal or radical political sentiments.

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