The US government has loaned 45.2 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) to major oil companies, aiming to curb prices that have climbed to four-year highs amid the conflict with Iran.
Details of the Initial Release
This first batch accounts for 52% of the up to 86 million barrels outlined in last week’s announcement. Overall, authorities plan to release 172 million barrels throughout this year and into the next.
The Energy Department confirmed that companies receiving these initial SPR loans include BP Products North America, Gunvor USA, Marathon Petroleum, and Shell Trading. Further contracts went to Energy Transfer Crude Marketing, Mercuria Energy America, Trafigura Trading, and Vitol.
Response to Market Pressures
The move supports a coordinated effort by 32 International Energy Agency nations to free up 400 million barrels from global reserves. The conflict, launched by the US and Israel on February 28, has propelled crude prices to peaks unseen since Russia’s invasion of Ukraine began.
Repayment Terms and Benefits
Recipients must repay the oil plus a premium of 18% to 22% in additional barrels, a structure designed to steady markets at no expense to taxpayers. Bidders offered higher premiums to secure contracts. This first phase alone will boost the SPR by nearly 10 million barrels.
In total, the US expects to exchange 172 million barrels and receive back about 200 million, incorporating the premiums.
Strategic Petroleum Reserve Facts
Housed in underground caverns along the Texas and Louisiana coasts, the SPR contains roughly 415 million barrels of crude—enough to cover global demand for more than four days.
