Editorial | Good sign as China and the US recognise mutual self-interest
- The US and China have agreed to cooperate in the release of oil reserves in concert with several American allies in a bid to slow skyrocketing prices and fight surging inflation. Success remains to be seen, but this at least shows that two countries that are often bitter rivals can still work together when they chose to do so
In an unprecedented move, Washington will release 50 million oil barrels from the US emergency reserves. It aims to “shock and awe” the oil market in coordination with Japan, India, South Korea and Britain, in addition to China.
The main reason the US needs China on board has less to do with how much oil Beijing will release than that China is the world’s biggest buyer of crude oil. Washington needs the Chinese to commit not to buy up the additional supply being released, thereby nullifying the effect of the joint efforts. It seems the US has achieved this aim.
In a reversal of America’s diplomacy, the move co-opts China, usually seen as a strategic rival, but has angered Saudi Arabia, Washington’s long-time diplomatic anchor in the Middle East. Earlier, countries from Opec+, the oil cartel led by the Saudis and that includes Russia, rebuffed calls to significantly boost production. Now there may be a stand-off as Opec+ officials have already warned they are likely to respond by cutting production, thereby negating the addition of stockpiled oil onto the global market.