President Joe Biden has asked his Chinese counterpart Xi Jinping to release more crude oil from its reserves in concert with the U.S., in a bid to stabilize international oil prices.
That’s according to a South China Morning Post report citing an unnamed source familiar with the topics that Biden and Xi discussed during a virtual meeting this week.
China released gasoline and diesel from its reserves earlier this month to halt a price rise in some parts of the country that was beginning to make people nervous. Two months earlier, Beijing held its first-ever crude oil auction, at which it offered 7.4 million barrels of crude from the strategic national reserve. The news of the auction pushed prices lower, but the effect did not last.
In the United States, members of the Biden administration have mentioned the release of oil from the petroleum reserve as one possible move to arrest the climb of fuel prices. Democratic legislators have called for this, although experts warn that it will not have the desired effect.
“One of the pressing issues for both sides is energy supply,” said the South China Morning Post source. “Currently, the energy departments from both sides are negotiating the details.”
China, according to the source, is open to a concerted release of crude oil from the two national reserves but has not yet made a specific commitment, noting that it needed to first take care of local consumption needs.
The proposal appears to be yet another tool in President Biden’s box for handling gas price trouble—a box that has been often referred to by his administration but rarely in any detail. One other suggestion that a group of Democratic senators made earlier this month was to ban crude oil exports so there is more crude for the domestic market.
The idea did not win support from the oil industry.
By Irina Slav for Oilprice.com
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