China joins the US initiative to reduce oil prices

In a unique agreement in an atmosphere of geopolitical tension, China announces that it will use its oil reserves in an effort to reduce oil prices.

  • China is using its oil reserves in an effort to lower oil prices

China announced today, Wednesday, that it will use its oil reserves in an effort to reduce oil prices, following in the footsteps of the Joe Biden initiative.

US President Joe Biden announced Tuesday Launching a “major initiative” In order to reduce the price of black gold, by pumping 50 million barrels of the country’s strategic oil reserves, the largest amount to be withdrawn.

The United States had announced that China would join this initiative, as did India, Japan, South Korea and the United Kingdom, but without revealing any additional details.

White House spokeswoman Jen Psaki said these countries have “already announced” the use of some of their stockpile reserves or intend to do so.

Without mentioning the United States, Chinese Foreign Ministry spokesman Zhao Lijian confirmed on Wednesday that Beijing would join the initiative.

He told reporters that “China, given its current needs and conditions, will withdraw from its national stock of crude oil, and will take other necessary measures to maintain market stability.”

Zhao did not specify the date of this withdrawal or the amount of oil that Beijing intends to pump into the market.

And Bloomberg reported that President Biden spoke about the initiative last week with his Chinese counterpart, Xi Jinping, during their first video meeting.

“We are launching a major initiative,” Biden said in a speech against the backdrop of pictures of gas stations and tanks. He pledged from the White House that the initiative “won’t lower prices overnight” but that it would “make a difference.”

And before the Americans begin their long-distance trips to spend the Thanksgiving holiday, Thursday, with their families, the US President, on Tuesday, again accused the major oil companies of bearing part of the responsibility for the issue of high fuel prices.

He said that “fuel prices in the wholesale market have fallen by about 10% over the past years, but the price at gas stations has not moved a single penny.”

“In other words, the fuel groups pay less and profit a lot more,” he added, accusing companies of “earning the difference” between wholesale and retail prices. He considered that “unacceptable”.

The United States usually uses only the tiny fraction of these reserves, currently estimated at 609 million barrels, stored underground in Louisiana and Texas, in the event of natural disasters or international crises.

In a statement, prominent Republican Senator Lindsey Graham denounced what he described as an “abuse” of these “emergency” reserves.

The high prices at US stations that consume large quantities of gasoline, a major political dilemma for President Joe Biden.

He has repeatedly stated that his main political goal is to ease the living burdens of the disenchanted middle class due to globalization and the COVID-19 pandemic.

Within ten days, Biden released a massive $1.2 trillion infrastructure modernization plan and pushed the legislative process forward for a massive $1750 billion social and climate spending program.

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