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Oil-hungry Asian nations pounce on low prices

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Some oil-hungry Asian nations are taking advantage of the collapse in prices caused by the coronavirus pandemic to build up their crude stockpiles. 

Here are some questions and answers about strategic reserves and the region’s oil supplies:

What are strategic oil reserves and why do countries need them?

Strategic reserves are stockpiles of oil and other fuels held by governments in secure storage facilities to cover unexpected disruptions to energy supplies.

Major economies such as the US, China and Russia began to build up reserves after oil shocks in the 1970s, according to Ravi Krishnaswamy, regional senior vice president for energy and environment at consultancy Frost & Sullivan.

The events that spurred them to take action were principally the 1973 Yom Kippur War between Israel and the Arab nations, and the 1979 Iranian revolution, which fuelled worries about supplies. 

How big are the strategic reserves across the region?

China is believed to have the biggest in the Asia-Pacific. Beijing does not give an official estimate but analysts say it is at around 550 million barrels. In comparison, the United States’ strategic reserves currently hold around 630 million.

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