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China Seen Releasing Oil from Stockpile to Bring Down Prices


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China will release crude from its strategic oil stockpiles around the lunar new year in February as part of a plan urged by the US with other major consumers to cut fuel prices, sources say


China's imported 8.42 million tonnes of Russian oil in May – a record amount – as refiners snapped up cheap crude after Russia was hit with sanctions  because of its invasion of Ukraine.
Oil and gas tanks are seen at a port in Zhuhai, China. Photo: Reuters

 

China will release crude oil from its national strategic stockpiles around the lunar new year holidays that start on February 1, as part of a plan reportedly coordinated by Washington with other major consumers to reduce fuel prices.

Beijing agreed in late 2021 to release an unspecified amount of oil depending on price levels, sources told Reuters.

“China agreed to release a relatively bigger amount if oil is above $85 a barrel, and a smaller volume if oil stays near the $75 level,” one source said.

The release of crude stocks by China will occur while the country is largely shut down for the biggest annual holiday from January 31 to February 6.

The National Food and Strategic Reserves Administration did not immediately respond to a request for comment.

The agreed release of reserves by China is the result of a series of discussions that the US held with other major oil consumers after tight supplies drove global oil prices to multi-year highs. .

US negotiators met close allies including Japan, South Korea and India, as well as with China.

The US has conducted crude swaps and sales from its reserves over the past few weeks, while Japan and South Korea have also announced plans for crude sales.

China, which has long kept details on its reserves a secret, conducted last September its first-ever public crude reserves auction of about 7.4 million barrels, about half a day’s consumption in the country.

 

• Reuters, with editing by George Russell

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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