US lends oil companies 45.2 mln barrels from reserve amid Iran war

The U.S. government lent 45.2 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) to major oil companies in an effort to ease surging prices driven by the war in Iran.

The initial loan represents 52% of the 86 million barrels the administration announced last week, and is part of a larger plan to release a total of 172 million barrels over the course of this year and into next, Caliber.Az reports via foreign media.

Companies awarded the first batch of SPR loans include BP Products North America, Gunvor USA, Marathon Petroleum and Shell Trading, the Energy Department said in a statement.

The loans are structured under a premium system in which companies will return the oil with extra barrels, which the Energy Department described as a measure “meant to stabilize markets at no cost to American taxpayers.” The premium for the oil ranges from 18% to 22%, with bidders able to offer more in hopes of securing contracts.

The loan programme is part of a coordinated effort with 32 countries in the International Energy Agency to release 400 million barrels of oil from strategic reserves globally.

“The war launched by the U.S. and Israel on February 28 has pushed crude prices to their highest since the start of Russia's invasion of Ukraine,” the Energy Department said.

Other companies awarded contracts as of Friday include Energy Transfer Crude Marketing, Mercuria Energy America, Trafigura Trading, and Vitol.

The SPR, stored in underground caverns along the coasts of Texas and Louisiana, currently holds around 415 million barrels of crude — more than enough to cover global consumption for four days.

The department noted that the initial process will eventually add nearly 10 million barrels back to the SPR. Once completed, the U.S. expects oil companies to return about 200 million barrels, including the premium.

By Aghakazim Guliyev