China has released oil from its reserves to reduce its prices

China has intervened unprecedentedly in the global oil market. It has released oil from its strategic reserves with the explicit aim of reducing its prices. Beijing's announcement comes at a time of soaring prices in the world's second-largest economy, not only oil but also coal and gas. In addition, the shortage of electricity in some provinces has forced some plants to reduce production. Another political problem for Beijing is the sharp acceleration of inflation. China's National Bureau of Food Stocks and Strategic Reserves said on Thursday it had released oil from its vast reserves "to ease upward pressure on commodity prices." The office did not provide any details, but according to sources familiar with the matter, there were millions of barrels (1 barrel = 159 liters) of oil offered by the government in mid-July. The Office added that the "normalized" rotation of oil in state reserves is "an important way in which these reserves play their role in balancing the market". According to the agency, demand and supply on the domestic market are better stabilized when government reserves enter the market through open auctions. This signals that Beijing may continue to intervene. China is the world's largest importer of oil and has built up 220 million barrels of supplies over the past decade, according to Energy Aspects. These reserves differ from the strategic stocks held by the United States and Europe. These are drawn only during a shortage of supplies or wars. However, China signals that it is willing to use its reserves to influence the market. According to experts, Beijing's goal is to reduce oil prices for domestic refineries.