“The advent of [more sellers of] LNG is another challenge of the gas market,” Adeli said and noted that the U.S. has utilised modern technologies to produce gas from shale, so that the country has been turned from a gas importer to an exporter. Australia, another OECD country with no interest in joining organisations that could be seen as cartels, is already an LNG exporter and its output is rising sharply over the coming few years.

Crude oil prices ended 2015 below $40 per barrel (b), the lowest level since early 2009. Spot prices for the international crude oil benchmark Brent averaged $52/b in 2015, 53% below the level in 2014 and 49% below the average price over 2010-14. Spot prices for West Texas Intermediate (WTI) crude oil were also down 53% in 2015 compared with 2014, averaging $49/b for the year.

Underground sites are slated to hold about 130 million barrels, which would account for nearly a quarter of the 550 million-barrel SPR target set by Beijing for 2020, according to local media and analysts.

“Given the volumes of gas shipped to Europe, the marginal cost of additional Russian gas is low and they should be able to compete with US LNG supplies,” said Malcolm Johnson, a Guildford, England-based faculty member of The Oxford Princeton Programme, an energy training provider. “However, it is clear that in certain countries there is a desire to diversify supplies for supply security.”