China’s oil purchase fraught with woes

China is now contemplating the Japanese mode of oil reserve construction, which is composed of government and enterprise oil reserves.

Japan’s government oil reserves mainly handle crude oil imports, while those of enterprises deal with both crude oil and finished oil products.

China’s target is not as ambitious as the SPR or Japan’s strategic reserve however, as the latter can hold reserves equivalent to 90 days of imports.

That said, this plan is now in deep freeze because China has to wait until the price comes to less than US$15 a barrel to make it viable. Given the high price of oil, this will probably never happen.

The Star