Opinion | Why US-China oil reserve release won’t fix deeper demand-supply problems
- Oil supply will remain tight as investors turn away even as demand rises with pandemic recovery and the building of a renewable energy network
- China should also be extra careful – its oil reserves and access to supply are not as ample as America’s
Releasing oil from strategic reserves to take some heat out the recent upsurge in crude prices might make economic and political sense in both China and the United States. But it is nothing more than a quick fix and does not address the fundamental supply flow problems that have been driving up the oil price.
As the world’s biggest oil importer, China should arguably also be a little cautious about how far it goes down this path.
The US can draw from its strategic petroleum reserve knowing it has ample sources of domestic shale energy and offshore oil to tap if needed. China does not have access to that scale of domestic hydrocarbon resources, which goes a long way to explaining why Beijing retains a substantial strategic petroleum reserve in the first place.
After all, there’s a reason it’s called a “strategic” reserve.
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