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The Federal Reserve finally raised interest rates on December 17; as a result of the stronger U.S. dollar, international commodity prices and oil prices declined. As of the close on the 17th, WTI January crude oil futures closed at $34.95 per barrel, hitting a 7-year low. The persistently low oil prices have forced traditional Western oil giants to cut costs and even carry out large-scale layoffs. For oil-consuming countries in Asia, low oil prices bring benefits to the refining industry as well as to end consumers. For Chinese oil companies with strong financial resources, it is possible to enter into partnerships with overseas energy giants at oil prices around $40; the associated oil cost and valuation are relatively low, giving them more bargaining power. On the 17th, the successful transfer of Sinopec’s 10% stake in Russia’s gas giant Syberia is a great example of the fruitful phase of energy cooperation between China and Russia in an environment of low oil prices. Production cuts fail to ease pressure on oil prices; international oil prices hit another record low shortly after falling below the $40 mark. On the first trading day after the Federal Reserve raised interest rates on the 17th, WTI crude oil futures for January fell by 1.6%, ending at $34.95 per barrel – the lowest level since February 2009. Brent crude oil futures for January also dropped by 0.9%, reaching $37.06 per barrel, which is just slightly above its lowest level of $36.40 in 2004. There are varying opinions in the market regarding whether oil prices will fall below $30. Firms such as Goldman Sachs and Blackstone are bearish on oil prices in the short term; some analysts suggest that oil prices could fall below $30 by 2016. However, OPEC insists that due to reduced investment this year, supply and demand will reach a balance within the next year, after which oil prices are expected to stop falling and start rising again. “OPEC’s ability to regulate crude oil supply and demand as well as oil prices is no longer what it used to be. ”Chen Weidong, a senior researcher at CNOOC Energy Economics Research Institute, said in an interview with a reporter from 21st Century Business Herald at the \"Looking Ahead to 2016\" summit held by Bloomberg Businessweek China edition that OPEC failed to reach any new agreements at its meeting in Vienna at the beginning of the month. To compete for market share with U.S. shale oil and Russia, OPEC will maintain its current production quotas without setting new limits on output. Chen Weidong said that in the past, within OPEC, Saudi Arabia has always served as a pressure regulator for the international oil market. At present, there are serious divisions within OPEC, and no one is willing to cut production in order to retain their market share. But neither the United States nor Russia is willing to cut production either. Despite reports of drilling rigs shutting down on a weekly basis and oil companies cutting expenses due to oil prices falling below $35 per barrel, the U.S. energy secretary still stated that U.S. crude oil production will recover. U.S. Energy Secretary Moniz recently stated that U.S. oil production has not declined sharply; the U.S. Energy Information Administration (EIA) predicts that the average daily crude oil production in the United States this year will still exceed 9 million barrels, with the drop in production not being significant – daily production is still 4 million barrels higher than it was a few years ago. Russia’s stance was equally firm. Milov, the deputy minister of energy in Russia, said recently that Russian oil companies will cut spending next year, but will not deviate from their production plans. Russia will not rashly reduce its crude oil production. However, Lin Boqiang, director of the Energy Economics Collaborative Innovation Center at Xiamen University, is optimistic about the future trend of international oil prices. Lin Boqiang said that the supply of crude oil requires investment to be ensured; this year, global investment in the oil and gas industry has declined significantly, which means that supply will also decrease in the year after that. Low oil prices will not remain constant; at a certain point, the crude oil market will achieve a rebalancing of supply and demand. Lin Boqiang predicts that in the second half of 2016, international oil prices are likely to rebound moderately, returning to around $70 per barrel. The two major oil companies are accelerating their efforts to acquire assets overseas; with oil prices continuing to fall, oil-producing countries and oil giants are under immense pressure. In 2014, Rosneft’s net profit was around 350 billion rubles, a 9.8% decrease compared to the 2013 fiscal year. According to Reuters, as of the end of last year, Rosneft owed banks and bondholders a total of around $60 billion in debts, an amount that is quite substantial among global oil giants. “With oil prices so low at the moment, Russian oil companies are under heavy debt pressure and facing financial constraints; they urgently need China. ”In an interview, Lin Boqiang said that against the backdrop of Western sanctions and downward pressure on Russia’s economy, falling oil prices represent an additional burden for Russia, which relies heavily on raw material exports. Public data shows that over half of Russia’s fiscal revenue comes from oil and gas exports. According to previous industry estimates, for every $1 drop in oil prices, Russia’s fiscal revenue decreases by 70 billion rubles (approximately $1.5 billion). Lin Boqiang believes that for China’s large oil and gas companies, the period of low oil prices ranging from $35 to $40 per barrel represents an excellent opportunity to negotiate partnerships with financially strained energy giants, as well as favorable conditions for expanding overseas. On the 17th, Sinopec and CNPC entering into partnerships with two Russian energy giants, Siberian Energy and Gazprom, are excellent examples of this. Sinopec announced on the evening of the 17th that the acquisition of 10% of Sabic’s shares by Sinopec had been completed successfully. On the 18th, CNPC also announced that it and Gazprom signed a cooperation agreement in Beijing on the afternoon of the 17th. The two sides will jointly explore cooperation in upstream sectors in Russia and other third countries. During the grand military parade in Beijing in September this year, in the presence of China’s **leader** and Russian President Putin, Sinopec and CNPC signed framework cooperation agreements with Russian energy giants such as Rosneft, Siberian Energy, and Gazprom. These framework agreements laid the groundwork for the delivery on the 17th and the signing of the cooperation agreement. According to Russian media reports on the 13th, Russia has **approved Sibur Group’s sale of 20% of its shares to Sinopec. In the first phase, Sinopec will acquire 10% of the shares, and another 10% over the next three years. Sinopec will pay $1.338 billion for the equity acquisition in the first phase; the price of the remaining 10% of the equity has not yet been determined. Wang Yupu, chairman of Sinopec, said, “Sinopec’s investment of 10% in Xibeiur not only further deepens the cooperation between the two companies but also represents a positive effort to implement the **‘Belt and Road’ development strategy.” Xibei’s development direction toward integration of resources and petrochemicals aligns well with Sinopec’s core business activities, as well as with Sinopec’s strategic plans for expanding its chemical industry operations overseas. This approach contributes to diversifying and ensuring the long-term supply of Sinopec’s products. ” The cooperation agreement between CNPC and Gazprom is even more significant. Wang Yilin, chairman of CNPC, noted that the Agreement on the Design and Construction of the Cross-border Section of the China-Russia East Gas Pipeline Project outlines the procedures for the design and construction of this cross-border section, and sets requirements regarding project quality and environmental protection during the construction phase. The Russian section of the China-Russia Eastern Gas Pipeline, namely the \"Power of Siberia\" pipeline, began construction on September 1, 2014, while the section in China started construction on June 29 of this year. Completion and commissioning of the pipeline are scheduled for the end of 2018. Wang Yilin also said that the signing of the Memorandum of Understanding on cooperation between CNPC and Gazprom Neft further expanded the areas of cooperation between the two parties. They will work together to explore opportunities for collaboration in the upstream sector in Russia and other **regions, focusing on areas such as exploration, development, oil and gas product sales, engineering technical services, and equipment trade. Furthermore, in an interview with a reporter from 21st Century Business Herald, Li Li, director of Anxunsi China Energy Research Center, also stated that oil prices ranging from $35 to $40 represent a challenge for Chinese oil companies, but at the same time they present an excellent opportunity to carry out reforms. In the first half of this year, the revenue and profits of China’s three major oil companies all experienced significant double-digit declines. According to the financial reports, PetroChina’s total revenue in the first half of this year was 877.624 billion yuan, a decrease of 23.9% compared to the previous year ； The net profit attributable to shareholders of the parent company was 25.404 billion yuan, a decrease of 62.7% on a year-on-year basis. Under significant performance pressure, CNPC has been very active recently. At the end of November, CNPC announced the sale of 50% of the assets of the Central Asia Gas Pipeline, with the transaction value amounting to approximately 15–15.5 billion yuan, equivalent in US dollars. Both Lin Boqiang and Li Li believe that, in addition to the aim of improving performance in the short term, CNPC’s decision to divest its Central Asian pipeline assets is also a preparatory step toward achieving the goal of an independent pipeline network outlined in the oil and gas plan for the 13th Five-Year Plan period. Lin Boqiang predicts that the transfer of assets related to the Central Asian pipeline is likely to be just a small step in CNPC’s overall plan to divest its pipeline network.