China to sell oil from state reserves in bid to contain prices

China to sell oil from state reserves in bid to contain prices

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China has announced it will sell oil from its state petroleum reserves for the first time, as Beijing steps up efforts to rein in inflationary pressures stemming from commodity markets.

The State Bureau of Grain and Material Reservessaid on Thursday it would release batches of oil for sale to domestic refining and chemicals companies to “alleviate the pressure of rising raw material prices”.

“Putting national reserve crude oil on the market through open auction sales will better stabilise domestic market supply and demand and effectively guarantee national energy security,” it said.

While other large oil importers like the US have periodically tapped their national reserves during supply disruptions or to meet budgetary needs, it is the first time China has publicly announced its intention draw on its stocks.

China, which overtook the US to become the world’s biggest importer of crude oil last decade, has historically said little in public about its large strategic petroleum reserves and the reserves administration did not specify how much oil it will sell.

Amrita Sen at consultancy Energy Aspects, said China had quietly sold oil reserves in the past but now appeared to want to