Biden said on November 23 that India, Japan, South Korea and the United Kingdom have agreed to release crude oil reserves, and China may do more. The White House also issued an announcement stating that China, the United States, Britain, India, Japan and South Korea will simultaneously release their oil reserves. But until November 25, China still has not announced specific measures.
At a regular press conference on the 24th, the spokesperson of the Chinese Ministry of Foreign Affairs Zhao Lijian also refused to confirm China’s participation in the six countries’ plan to release crude oil reserves. Zhao Li insisted: “China will arrange the release of national reserves of crude oil and other necessary measures to maintain market stability based on its own actual conditions and needs, and announce relevant news in a timely manner.”
The Wall Street Journal said earlier that the simultaneous release of crude oil reserves is the latest sign of the United States and China seeking to calm geopolitical tensions and cooperate.
But in the face of Beijing’s sluggishness, the newspaper reported on the 25th that crude oil futures rose sharply on Tuesday after the Biden administration announced a coordinated release of strategic oil reserves by energy consumers led by the United States. Why is this happening? According to a report by Mizuho Securities, “the fragile nature of the US swap program, the small number of participation in the release, and China’s failure to make a commitment, these factors have pushed up oil prices.”
While Beijing failed to fulfill its promises, it also took the opportunity to taunt Washington.
The Chinese Communist Party’s official media “Global Times” published an editorial on the 24th, stating clearly in the title, “To curb inflation, Washington has come to Beijing again.”
Bloomberg explained on the 23rd that most of the crude oil reserves released by the United States are likely to eventually flow to China and India.
The report quoted market traders as saying that domestic oil refineries in the United States have always wanted to avoid buying U.S. reserve oil, which has a higher processing cost. However, for foreign buyers, the U.S. crude oil reserve is very attractive because it is more attractive than the global Brent. Benchmarks are much cheaper. The latest records show that China and India have been actively purchasing US crude oil produced in the Gulf of Mexico.
Bloomberg said, therefore, it is not difficult to understand why Beijing and New Delhi agreed to participate in the release of reserves led by Biden.
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