LONDON: China has increased its purchases of its oil reserves this year even as oil prices have soared, despite calls from Washington for a coordinated release of global inventories to help cool the market, data shows. industry and traders, according to Reuters.
Washington has sought China’s cooperation to bolster the impact of a coordinated release of strategic oil stocks from major consumers to mitigate the surge in oil prices, which topped $100 a barrel this week for the first time. since 2014 after Russia invaded Ukraine.
On Thursday, President Joe Biden said the United States was working with other countries on a new version after the one from November last year.
The United States had announced a release of 50 million barrels from its own stocks in November and said China, India, Japan, South Korea and the United Kingdom would do the same. The move came as gasoline prices in the United States soared and inflation soared.
India, Japan, South Korea and the UK said they would release modest volumes. China, the world’s second-largest consumer and largest importer, never officially committed to the move and instead bought more for its reserves.
Two oil trading sources said Beijing stepped up its buying immediately after Chinese President Xi Jinping met with Russian leader Vladimir Putin in early February in Beijing.
China’s National Administration of Food and Strategic Reserves did not respond to a request for comment.
A spokesman for China Petroleum and Chemical Corp., known as Sinopec, said the company’s crude oil imports in January were flat from a year earlier and the company is still compiling data from February. He did not elaborate further.
The US government declined to comment when asked why China had not participated in releasing the stored oil.
“We received new requests (from Chinese buyers) to bring more oil to China as early as the beginning of February,” said a senior source at a major oil trading office.
Another source at a major trading company said he and his rivals brought several shipments of crude to China from the United States in February.
Trade sources said they were unsure if China was aware of the upcoming invasion of Ukraine, they said it was clear that it had decided to increase its oil stocks even as the prices skyrocketed.
China’s total oil stocks rival in size US strategic stocks.
A Chinese oil trading executive said earlier this month that his company had been asked to work on a plan to release stored oil, but no firm government orders followed.
Two other China-based trade executives said an unusual buying spree by Unipec, Sinopec’s trading arm, in recent weeks was partly aimed at boosting stocks.
“Crude oil inventories in China have increased by around 30 million barrels since mid-November, with 10 million barrels in refineries and 20 million in commercial terminals,” said Augustin Prate of the analytics consultancy of Kayrros data.
Kayrros puts total crude oil inventories in China, from satellite monitoring of reservoirs, at 950 million barrels.
A US source with knowledge of the latest talks between the United States and the International Energy Agency said the country was working with the IEA, the energy watchdog for developed countries, to release new reserves. China is not a full member of the IEA.
“We stand ready to take global action if needed,” said a US government official, asking not to be named.
“It’s a different scenario than we had in November because we are now in a serious crisis in Ukraine.”