Traffic congestion in Shanghai is more than a third lower than a year ago, highlighting the impact on oil demand as Chinese authorities stick with their Covid Zero strategy to try and stem the omicron virus variant. 

China has imposed more lockdowns over the past week than at any point in the pandemic as it battles the fast-spreading strain. There are restrictions on movement in the commercial hub of Shanghai, the manufacturing center of Shenzhen, Jilin province in the north-east and Langfang City near Beijing.

That’s causing a lot less driving, not only in the locked down areas but also in other cities as people take a cautious approach, opting to work from home and not go out as much. Peak congestion in Shanghai fell 36% on Tuesday from a year ago, while in Shenzhen it was down 26%, according to data from Baidu Inc. In Beijing, not yet subject to restrictions, traffic levels were 25% lower.

The impact of the lockdowns in the world’s largest oil importer are feeding through to global markets. Along with speculation about a potential cease-fire in Ukraine, they’ve been a contributor to crude prices retreating from the dizzying heights near $140 a barrel reached last week. That impact could increase if more restrictions on movement are imposed around the country.

“More widespread lockdowns will weigh on mobility in the coming weeks,” Energy Aspects Ltd. said in a note this week. The industry consultant cut its oil demand forecasts for China by 170,000 barrels a day this quarter and 130,000 in the April through June period. China’s total apparent oil demand was around 13.7 million barrels a day over January and February.

S&P Global Commodity Insights reduced its estimate for Chinese consumption of gasoline, diesel and jet fuel by 600,000 to 1 million barrels a day in March. The downward revision was due to “recent impacts from the Covid-19 resurgence on personal mobility, as well as the slowdown of manufacturing and construction activities, ” said Fenglei Shi, Greater China oil market analyst.

As well as the drop in driving, some inter-provincial bus services have been halted, trucking activities at ports stalled and international flights diverted. In Shandong province, home to many of China’s private refiners, some facilities may be hit by logistical bottlenecks as restrictions are imposed in local areas, domestic industry consultant JLC said in a note.