According to sources, China will release crude oil from its national strategic stocks over the Lunar New Year holidays as part of a plan coordinated by the US and other major consumers to lower global prices.

The sources who have knowledge on the talks between the world's top two crude users, China agreed to release an undisclosed amount of oil in late 2021, depending on price levels.

"China agreed to release a significantly larger quantity if oil prices rise above $85 a barrel, and a lesser number if oil prices remain near $75," one source said.

China will release crude stocks around the Lunar New Year, which falls on February 1, according to the sources. From January 31 to February 6, China will be closed for the biggest annual holiday.

China's Oil Reserves Are Close to Reaching Storage Capacity - Bloomberg

The agreed release of reserves by China is the outcome of a series of talks between the Biden administration and other major oil consumers after tight supplies drove global oil prices to multi-year highs.

Biden and his top advisers explored the possibility of a coordinated crude stockpile release with Japan, South Korea, and India, as well as China.

Over the last two weeks, the US has conducted crude swaps and sales from its reserves, while Japan and South Korea have also revealed plans for crude sales.

Supply problems in Libya and Kazakhstan, a drop in US crude stocks to their lowest level since 2018, and an improvement in the forecast for fuel demand in Europe as governments lift COVID-19 restrictions sent oil prices beyond $80 a barrel this week.