The drastic steps taken to contain the COVID-19 outbreak are showing positive signs. However, the Chinese government now faces a crucial balancing act to return the country’s economic activity and social life to normal without causing the virus to spread further. How the central government and, equally importantly, local authorities navigate this challenge will determine the path of the country’s economy and its commodities demand in the coming few months and beyond. China’s demand for oil products will be affected by a slower than expected recovery in economic activity and weak domestic consumption in Q1. Seasonal demand patterns will change. And tougher business conditions for small- and medium-size enterprises will threaten jobs and income growth, undermining demand fundamentals.