The Trump administration said on Monday it will loan energy companies 53.3 million barrels of crude from the U.S. Strategic Petroleum Reserve as part of a global agreement to calm oil markets that have spiked on the U.S.-Israeli war with Iran.
Nine companies, including Exxon Mobil, Trafigura, and Marathon Petroleum Company, borrowed only about 58%of the 92.5 million barrels the Department of Energy last month had offered to loan from the SPR.
The DOE this spring had already loaned about 80 million barrels from the SPR as it seeks to release a total of 172 million barrels.
The U.S. agreed to that larger amount in March in a pact with more than 30 countries in the International Energy Agency to release about 400 million barrels. The agreement was an attempt to relieve oil and fuel prices pushed higher by Iran’s shutting of the Strait of Hormuz, a choke-point through which about 20% of the world’s oil usually passed each day.
Fatih Birol, the IEA’s head, has said the war has created the biggest-ever energy crisis. If supply disruptions from the war continue, the IEA is ready to release additional oil from strategic reserves, Birol said on May 7. So far, member countries have released 20% of available reserves, Birol said.
Soaring fuel prices are a risk to President Donald Trump’s fellow Republicans, who are campaigning to hold thin majorities in the U.S. Congress in the November midterm elections. U.S. gasoline prices hit an average of $4.52 a gallon as of Monday, the highest since 2022, according to AAA motor club data.
The DOE is loaning oil from the SPR to companies that will repay in crude, with premiums of up to 24%. The department says that system will help stabilize markets at no cost to U.S. taxpayers.
The SPR, held in caverns at four sites on the coasts of Texas and Louisiana, currently holds about 384 million barrels, less than what the world uses in four days.
(Reporting by Timothy Gardner and Ismail Shakil, Editing by Michelle Nichols and Rod Nickel)