US loans 53.3 million barrels from Strategic Petroleum Reserve
The Trump Administration announced on Monday that it would loan 'energy companies' 53.3 million.barrels from the U.S..Strategic.Petroleum Reserve, as part of a worldwide agreement to calm down oil markets which have spiked due to the U.S. -Israeli War with Iran.
Exxon Mobil and Trafigura are among the nine companies that borrowed less than 58% of the 92.5 million barrels offered by the Department of Energy to the SPR last month.
This spring, the DOE had already borrowed about 80 million barrels. It is aiming to release a combined 172 million barrels.
The U.S. agreed on this larger amount in March, in a deal with over 30 countries of the International Energy Agency. This agreement will release approximately 400 million barrels. The agreement was a way to reduce oil and fuel costs that were pushed up by Iran's closure of the Strait of Hormuz. This choke-point is where about 20% of world oil passes through each day.
Fatih Birol is the head of the IEA. He has stated that the war has caused the largest energy crisis in history. Birol stated on May?7 that if the supply disruptions caused by the war continue, IEA was ready to release more oil from its strategic reserves. Birol stated that member countries had released 20% of their available reserves so far.
Fuel prices that are on the rise are a threat to the?Republicans of President Donald Trump, who are trying to win a thin majority in Congress during?the midterm -elections in November. According to AAA motor club data, U.S. gas prices have reached an average of $4.52 per gallon on Monday. This is the highest price since 2022.
The DOE will lend oil from the SPR to companies that will pay back in crude with premiums up to 24 %. The Department says the system will help "stabilize markets" at no cost to U.S. taxpayers. taxpayers.
The SPR is located in caverns on?four sites along the coasts of Texas & Louisiana and currently holds 384 million barrels. This is less than the amount the world consumes in four days.
(source: Reuters)
