Washington asks Beijing to release oil reserves – report
The United States has asked China to release oil reserves to help stabilise soaring international crude oil prices as part of ongoing discussions on economic cooperation between the two countries.
The US wants China to join it in releasing crude oil reserves and the issue was raised during the virtual meeting between Chinese President Xi Jinping and US President Joe Biden on Tuesday, according to a person familiar with the matter.
The issue was also broached during a phone conversation between Chinese foreign minister Wang Yi and US Secretary of State Antony Blinken two days earlier. “One of the pressing issues for both sides is energy supply,” the person said, who requested anonymity as the information is not public.
“Currently, the energy departments from both sides are negotiating the details,” the person said, adding that China is open to the US request but has not committed to specific measures yet, citing the need to consider its domestic consumption needs.
Source familiar with the matter The US has the world’s largest reported strategic petroleum reserve at 727 million barrels whereas China has about 200 million barrels and is by far the world’s largest importer of crude oil. If the two countries jointly take action, it will have a deep impact on global oil prices. Regardless of China’s decision, Washington is likely to announce – as early as next week – that it will start to gradually release strategic petroleum reserves into the market early next year. Speaking in a teleconference later on Tuesday, Vice Premier Han Zheng said authorities would be closely monitoring international energy market changes. “(We must) strengthen management of energy trade and reserves management to better guide and stabilise market expectations,” he said, according to a report by state news agency Xinhua. The Biden administration is under growing pressure to consider releasing strategic reserves, after US inflation jumped above 5 per cent for six straight months, due to pandemic-related supply disruption and monetary stimulus by the Federal Reserve. The US inflation rate hit 6.2 per cent in October. Earlier this month, the Organization of Petroleum Exporting Countries (OPEC) and its allies refused a US request to produce more crude. US West Texas Intermediate, a crude benchmark, is up 67.5 per cent year to date. “We need immediate relief at the gas pumps and the place to look is the Strategic Petroleum Reserve,” Senate Majority Leader Chuck Schumer was quoted by Reuters as saying on Sunday. In Tuesday’s Xinhua report, Xi said the world’s two-largest economies should advocate for the international community to jointly safeguard global energy security and strengthen natural gas and new energy cooperation. NN: All China and the US has to do is make up no more then 2 million barrels a day of what OPEC is holding off the market. Between the US and China they have a billion barrels in storage. Releaseing 2 million barrels a day form their strategic stock pile is nothing. It would easily bring oil to $40 to $50 a barrel in two months