We will accelerate the development of an oil gas reserve system

We should give the same priority to the development of the oil gas reserve system as investment in oil gas exploration development, accelerate the formation of an oil reserve system in which government reserves, corporate social responsibility reserves production operation inventories are integrated complementary to each other, physical reserves, production capacity reserves other forms of reserves are combined. Oil prices rose above $100 a barrel for the first time since 2014, spurred by geopolitical tensions. Russia is the world's second largest oil exporter the world's largest natural gas exporter, plays an important role in the world oil gas market. The escalating conflict between Russia Ukraine has reignited fears of soaring energy prices supply shortages.

The "breaking 100" is the result of multiple factors. On the one hand, global crude oil demand is recovering steadily, but the two key indicators of international crude oil inventory idle capacity are both at historically low levels, resulting in insufficient supply. On the other hand, under the global wave of carbon emission reduction, many countries enterprises have cut exploration budgets, upstream oil gas investment continues to decrease. In addition, the complicated international situation, exacerbated the uncertainty of global crude oil supply, coupled with short-term money sentiment boost, so that international oil prices to new highs.

The International Energy Agency (IEA) said in a statement that it will continue to monitor the market closely assess the need to activate its emergency oil system, that its member countries stand ready to take collective action to ensure that the global oil market is adequately supplied. The US, Australia, Japan South Korea have all said they would consider releasing strategic oil reserves if the conflict between Russia Ukraine affected global oil supplies. As of the end of December 2021, the total oil stocks of IEA member countries were close to 4.16 billion barrels, of which 1.5 billion barrels were in government contingency reserves, according to the data.

Affected by the IEA member oil storage news, international oil prices fell short - term. But given global consumption of 100m barrels a day, the amount released can quickly be swallowed up by tight oil markets. In the medium to long term, it is difficult to have a lasting impact on oil prices. In November, after failing to pressure Opec plus to increase production, the US approved the release of 50m barrels of crude its strategic petroleum reserve in response to soaring oil prices. But so far, runaway oil prices have been curbed.

While it won't be able to reverse the rally, the importance of strategic crude reserves is undeniable. After the first oil shock in 1973, developed countries joined forces to set up the International Energy Agency. This is a joint effort by developed countries to ensure energy security. Its purpose is to take measures jointly by member countries to control oil demand, allocate oil in case of emergency, put an obligation on member countries to reserve oil equivalent to 90 days of net imports.

the experience of western countries, although strategic petroleum reserve cannot fundamentally restrain the price rise caused by oil shortage, it is still very effective in dealing with some emergencies ensuring national energy security stabilizing the oil market within a certain period. In September 2005, to help ease oil market tensions caused by hurricanes in the US, the IEA announced that all its members had agreed to release a total of 60m tonnes of oil strategic petroleum reserves for 30 days. This was a peacetime, IEA its member countries of a huge scale of the use of oil reserves, eventually led to the then international oil prices sharply back.

Due to resource endowment economic structure, China's dependence on foreign oil is more than 70%. The change of the world oil market has two main effects on China's oil security: first, there is the possibility of temporary shortage of international oil supply; Second, the international oil price may fluctuate sharply in a short term. If the oil price is too high, GDP growth will be reduced, if the price is too low, the domestic oil industry will suffer losses. Therefore, the establishment of a mature national strategic petroleum reserve system is very important for China's economic social development.

In 2001, China clearly proposed the establishment of strategic petroleum reserves, planned to complete the construction of oil depots other hardware facilities in three phases starting 2003. As of mid-2017, China had built nine national oil reserve bases used the storage capacity of the above-mentioned reserves some social enterprises to store 37.73 million tons of crude oil, according to the available new data on oil reserves released by the state. On the whole, the construction of China's petroleum reserve system has achieved positive results, but there is still a certain gap in scale, structure system compared with developed countries.

As a major importer of oil gas, we should give equal importance to the development of the oil gas reserve system as investment in oil gas exploration development, accelerate the formation of an oil reserve system that organically integrates complements government reserves, corporate social responsibility reserves, production operation inventories, combines physical reserves, production capacity reserves other forms of reserves. We will establish improve a multi-level natural gas peak-adjustment emergency response system in which local governments, gas supply enterprises, pipeline transportation enterprises urban gas enterprises assume their respective responsibilities. We will adopt multiple measures to deal with possible disruptions in international oil gas supply price fluctuations.

a higher dimension, while resolutely accelerating the clean energy transition, we should improve the energy supply guarantee reserve emergency system. We will coordinate the transition to green low-carbon energy ensure energy supply security, improve our capacity to adapt to economic social development various extreme situations, optimize the layout of energy storage facilities, improve the coordination mechanism for ensuring the supply of coal, electricity, oil gas. We will improve the systems for the production, supply, storage marketing of coal, petroleum natural gas, explore ways to establish systems for the production, supply, storage marketing of hydrogen energy. We will actively promote the construction of leading reservoir power stations in the basin, improve the capacity of reservoir storage, operation regulation emergency call.

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Source: China Economic Net

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