Despite rising oil prices this year, China has continued stockpiling crude oil, disregarding US recommendations for a global coordinated release of strategic reserves. The report by Reuters suggests that China increased its crude buying shortly after Vladimir Putin met with Chinese President Xi Jinping in Beijing earlier this month. Trading sources told Reuters they didn’t know if China was aware of Russia’s invasion of Ukraine earlier this week, which pushed oil prices beyond $100 a barrel.
Despite this year’s nearly 20% increase in oil prices, China has clearly opted to increase its crude reserves, according to sources. The Chinese buildup of oil reserves is an insult to the US administration, which in November encouraged key oil-consuming countries to release crude from their strategic reserves in an attempt to cut oil prices.
In a concerted effort with other major oil-consuming nations, US President Joe Biden indicated at the end of November that the Department of Energy will release 50 million barrels of oil from the SPR in an effort to cut high gasoline prices. South Korea and Japan, in a similar step, indicated they would soon contribute oil from their strategic reserves. South Korea wants to release 3.17 million barrels of oil reserves in the first quarter of 2022, while Japan expects to auction 629,000 barrels of crude oil from its national reserves in February.
Meanwhile, following the Russian invasion of Ukraine, oil prices soared over $105 per barrel, prompting President Biden to suggest that another release might be on the way. Biden exclaimed that they are actively engaging with governments throughout the world to elevate a collective release from key energy-consuming countries’ Strategic Petroleum Reserves.