China Stocks Up On Oil Despite Surging Prices And U.S. Call Despite rallying oil prices this year, China has been stocking up on crude oil, ignoring U.S. calls for a global coordinated release from strategic reserves, Reuters reported on Friday, citing traders and industry data.
China accelerated its purchases of crude immediately after Vladimir Putin met with Chinese President Xi Jinping in Beijing early this month, two oil trading sources told Reuters. Trading sources told Reuters they were not aware of whether China knew about the Russian invasion of Ukraine that took place earlier this week, sending oil prices to above $100 a barrel.
It was clear, however, that China has decided to boost its crude stocks despite this year’s rally in oil prices of over 20%, those sources told Reuters.
A Chinese building of oil reserves is a snub to the U.S. Administration, which rallied major oil-consuming countries in November to release crude from their strategic reserves in a bid to lower oil prices.
U.S. President Joe Biden said at the end of November that the Department of Energy would release 50 million barrels of oil from the SPR in a bid to lower high gasoline prices in a coordinated effort with other major oil-consuming nations. The SPR release from the United States will be carried out in parallel with other major energy-consuming nations, including China, India, Japan, South Korea, and the UK, the White House said at the time.
At the end of 2021, Japan and South Korea also said they would soon offer oil from their strategic reserves. Japan said it planned to auction in February 629,000 barrels of crude oil from its national reserves, while South Korea plans to release 3.17 million barrels of its oil reserves in the first quarter of 2022.
After oil spiked to $105 a barrel in the wake of the Russian invasion of Ukraine, President Biden said on Thursday that another release could be coming.
“We are actively working with countries around the world to elevate [evaluate] a collective release from the Strategic Petroleum Reserves of major energy-consuming countries. And the United States will release additional barrels of oil as conditions warrant,” President Biden said on Thursday, announcing the second round of sanctions against Russia over the attack on Ukraine.