The United States has loaned 53.3 million barrels of crude oil from its Strategic Petroleum Reserve to oil companies in an effort to calm global oil markets amid the ongoing US-Israel and Iran conflict. Under an agreement with the International Energy Agency, the US plans to release a total of 172 million barrels of oil. Meanwhile, gasoline prices in the country have risen to four dollars and fifty-two cents per gallon.
US to Loan 53.3 Million Barrels of Oil
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The administration of US President Donald Trump announced on Monday that it will loan 53.3 million barrels of crude oil from the US Strategic Petroleum Reserve (SPR) to energy companies. The move is aimed at calming oil markets affected by the ongoing US-Israel and Iran conflict. Companies including ExxonMobil, Trafigura, and Marathon Petroleum are among the firms receiving the oil.
Plan to Release 172 Million Barrels
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The US Department of Energy has already loaned around 80 million barrels of oil from the SPR earlier this spring and is now working on a larger plan to release a total of 172 million barrels. In March, the US reached an agreement with more than 30 countries under the International Energy Agency to release nearly 400 million barrels of oil after Iran closed the Strait of Hormuz, a route through which about 20 percent of the world’s oil supply normally passes every day.
IEA Calls It the Biggest Energy Crisis
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IEA chief Fatih Birol described the conflict as the biggest energy crisis so far. He said on May 7 that if supply disruptions continue, the IEA is ready to release even more oil reserves. So far, member countries have released around 20% of their available reserves.
Rising Fuel Prices Become Political Concern
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Increasing fuel prices are becoming a major challenge for Trump’s Republican Party ahead of the November midterm elections. According to AAA Motor Club, the average gasoline price in the US reached four dollars and fifty-two cents per gallon on Monday, the highest level since 2022.
Oil to Be Returned With Premium
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The Department of Energy is providing oil to companies as a loan, and the companies will later return the crude oil with a premium that could go up to 24 percent. Officials said the plan will help stabilize the market without costing taxpayers money. The SPR, stored in underground caverns across Texas and Louisiana, currently holds around 384 million barrels of oil, which is less than four days of global oil demand.
