China will release its state crude oil reserves in the Lunar New Year – starting 1 February – as it joins the US-led plan to drive down global oil prices, Reuters has reported.
The exact volume to be released has not yet been disclosed, and will reportedly be dependent on oil price levels.
The Biden administration conducted a series of talks in November last year with Japan, India, South Korea, and the UK, all major oil consumers, to launch a coordinated release of oil stockpiles, intended to help drive down rising prices as restricted supplies put a squeeze on the market.
While China typically keeps its oil reserves under wraps, in September last year the nation had its first ever public crude oil reserves auction, selling off 7.4 million barrels.
Over the past month, crude sales and swaps have been conducted by the US, with the US Energy Department this week disclosing the sale of 18 million barrels of its oil reserves to six companies including ExxonMobil and Valero Energy Corp.
Japan and South Korea have also announced their plans for crude sales this year.
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The US Department of Energy further announced in December last year that it was intending to sell 18 million barrels of oil from its reserves as part of its effort to curb prices. In the same month, Japan’s industry ministry announced that it will be holding an auction of crude oil from its reserves – representing just under 630,000 barrels. The auction is set to take place on 9 February this year.
Targeting fuel prices is expected to remain something of a priority for the Biden administration as it ramps up to the mid-term elections in November.
US Energy Information Administration estimates suggest global oil demand will increase 3.62 million barrels per day year on year from 2022 – meaning that demand will outpace pre-pandemic levels by 2023. Price benchmark Brent crude is currently sitting at just over $85 per barrel, with the rapid spread of the Omicron variant causing concern that prices will be driven up further.