As a result of its rising a higher level oil imports, China decided in 2003 to develop emergency oil storage facilities. The first phase of storage capacity was approximately 100m barrels of oil, and this also was carried out 2008. This was the same as about 1 month of net imports. This capacity is going to be raised to two months during this year, also to 90 days on or before 2015.

Construction on the next 8 strategic oil bases began in Q1, 2009. China’s first batch of strategic oil reserve bases were constructed in Zhenhai, Zhoushan, Huangdao and Daliian. The Zhenhai and Zhourshan strategic oil reserve bases come in operation for up to two years; as you move the Huangdao and Dalian bases went into operation after 2008. The National Oil Reserve Center, established in 2007 manages oil reserves.

In February, 2009, China began construction on the further massive storage base from the coastal town of Tianjan in Northern China. This base will incorporate storage tanks for State strategic oil reserves up to 31.5m barrels of oil.

Once the second phase of oil reserve building ends, China’s state oil reserve capacity are going to be some 281m barrels.

The therapy for oil stocks is becoming highly politicized, wherever they may be held inside world. The creation from the International Energy Agency (IEA) to treat the oil crisis on the 1970s triggered the construction of substantial strategic oil storage bases in those OECD countries which might be members in the IEA. These stocks are governed by rules which shipped to a coordinated launch of stocks reacting to a lowering of supply of oil to international markets; or, quite simply, reacting to a physical disruption of supply. The rules don’t provide a discharge of stocks using the aim of constraining high oil prices.

Though China has not yet published its official policy and rules for managing its strategic stocks, it’s got made clear who’s intends to start using thise stocks for price control and for reacting to physical disruption. Though China is involved in discussions while using IEA, while using US government and within ASEAN-plus-Three framework on the subject from the management of its strategic oil stocks, it’s not evident that this Chinese government will want a formal collaborative agreement covering stock release from the near future.