In a bid to cool rising oil prices amid the ongoing Middle East crisis the Trump administration has begun releasing crude from the Strategic Petroleum Reserve (SPR), lending 45. 2 million barrels to energy companies in its first round. The volume released so far represents just over half of the 86 million barrels the administration had earlier said it would make available in the initial phase. The broader plan is to lend a total of 172 million barrels, with deliveries scheduled through this year and into the next, according to Reuters.
The Energy Department said that firms awarded these early supplies include BP Products North America, Gunvor USA, Marathon Petroleum and Shell Trading.
Other companies that secured contracts by Friday are Energy Transfer Crude Marketing, Mercuria Energy America, Trafigura Trading and Vitol.
This release forms part of a wider coordinated effort involving 32 countries under the International Energy Agency, which together plan to inject 400 million barrels of oil into the market. Prices have climbed to their highest levels in four years following the war launched by the United States and Israel on February 28, marking the steepest surge since Russia’s invasion of Ukraine.
The arrangement operates as a loan rather than a sale, with companies required to return the crude along with additional barrels as a premium. The Energy Department said the system is intended to steady markets “at no cost to American taxpayers.”
Companies must repay between 18% and 22% more oil than they borrow, although some bidders offered higher returns to secure allocations. For the first tranche alone, the structure is expected to boost the reserve by nearly 10 million barrels once repayments are made.
The SPR, stored in underground sites along the Texas and Louisiana coastlines, currently holds about 415 million barrels of crude, equivalent to more than four days of global consumption.
Overall, while 172 million barrels are set to be lent out, the government expects to receive roughly 200 million barrels in return, factoring in the additional premium.
Earlier this month, US President Donald Trump said that he would tap into strategic reserves to reduce prices amid the ongoingIran war.
“Right now we’ll reduce it a little bit and that brings the prices down,” Trump said in an interview with Local 12 television, when asked if he was going to tap the US Strategic Petroleum Reserve.
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