(Bloomberg) -- China’s worst virus outbreak since the start of the pandemic has led to some oil refiners cutting back operations and is forcing analysts to rethink their demand estimates as strict lockdowns curb consumption.

The Covid-19 resurgence is posing a threat to global oil consumption and may accelerate demand destruction, helping to rein in bloated prices that soared on Russia’s war in Ukraine. Independent refiners in the key hub of Shandong have been forced to resell crude cargoes and reduce processing as flights are canceled and traffic thins in some of China’s biggest cities.

China has managed to bring previous outbreaks quickly under control since Wuhan two years ago, but the highly infectious omicron variant is challenging the nation’s Covid Zero strategy. Goldman Sachs Group Inc. last week trimmed its forecasts for global Brent crude prices and Chinese oil consumption in the second quarter due to the lockdowns from Shanghai to Shenzhen.

China’s President Xi Jinping has pledged to reduce the economic impact of his Covid-fighting measures, but current lockdowns are still hurting mobility -- some people are sleeping in their offices to avoid restrictions, while others are working from home. At least five analysts and industry consultants surveyed by Bloomberg including Energy Aspects Ltd., OilChem and CICC said they were in the process of cutting their second-quarter forecasts for Chinese oil demand.

The near-term economic outlook is more muted than previously expected, said Michal Meidan, director of the China Energy Research Programme at Oxford Institute for Energy Studies. China is unlikely to take any extra barrels and will probably rely on stockpiles, she added.

Crude inventories at 20 sites in Shandong province -- where half of China’s independent refiners are based -- rose over the past two weeks, compared with an overall national trend of falling stockpiles, according to Ursa Space Systems. The region’s processors have cut operating rates to around 50% of capacity, the lowest in five years excluding 2020, data from OilChem show.

Dongying, a Shandong refining hub, imposed traffic controls on some highways on March 16 for an indefinite period, slowing the delivery of fuel to domestic outlets. Other movement restrictions in Tangshan and Shenzhen are also causing logistical bottlenecks, weakening road freight demand.

There was also a mass cancellation of flights on Tuesday following the crash of a plane operated by China Eastern Airlines Corp., but it remains unclear at this stage how long some services will be disrupted.

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