According to Reuters, the US and China decided to unite to gain control over the global oil market. Some analysts suppose that this strategy is aimed at decreasing oil prices.
The Chinese authorities are ready to release oil from their strategic stockpiles. They are following the plan, according to which the US should unite with other leading consumers of oil to make the global oil market cheaper.
Reuters emphasizes that China is participating in the implementation of Joe Biden’s plan. The country is ready to use large amounts of oil, if its price exceeds $85 per barrel. In case oil prices remain around $75 per barrel, the Chinese authorities are planning to release a small amount of crude from their reserves.
Notably, in November 2021, the Biden’s administration held a series of discussions on the release of reserves with other major oil consumers. “Biden and top aides discussed the possibility of a coordinated release of crude stocks with close allies including Japan, South Korea and India, as well as with China,” Reuters wrote. Over the past month, the US sold a part of its oil reserves. Japan and South Korea also announced their intention for crude sales.
The countries suppose that Joe Biden’s plan will allow the allied countries to raise oil supply by means of its release from strategic stockpiles. Thus, the oil market oversupply may lead to lower prices.
At the moment, Brent crude surpasses $80 per barrel. There are several reasons for that, including disruptions in oil supply in Libya and Kazakhstan as well as a decrease in hydrocarbon reserves in the US over the past five years and a possible surge in fuel demand in Europe.