The Trump administration announced on Monday that it would lend 53.3 million barrels of crude oil from the United States Strategic Petroleum Reserve as part of a global agreement to calm oil markets that have seen a spike due to the conflict between the United States and Israel against Iran.
Nine companies, including Exxon Mobil and Marathon Petroleum Company, borrowed only about 58% of the 92.5 million barrels offered by the Department of Energy last month from the SPR.
Last spring, the DOE had already lent about 80 million barrels from the SPR, as part of its goal to release a total of 172 million barrels into the market.
The United States agreed to this larger volume in March as part of a deal with over 30 countries in the International Energy Agency (IEA) to release about 400 million barrels. This agreement aimed to lower oil and fuel prices after Iran closed the Strait of Hormuz, a chokepoint through which about 20% of the world’s oil typically passed each day.
Fatih Birol, the IEA director, stated that the war had caused the most severe energy crisis ever. If supply disruptions continue due to the war, the IEA is ready to release additional oil from strategic reserves. To date, member countries have released 20% of available reserves.
The rise in fuel prices poses a risk for Republicans, allies of President Donald Trump, who are campaigning to retain their slim majority in the U.S. Congress in the November midterm elections. Gasoline prices in the United States reached an average of $4.52 per gallon on Monday, their highest level since 2022, according to AAA data.
The DOE lends oil from the SPR to companies that will repay it in crude, with premiums of up to 24%. The department states that this system will help stabilize markets at no cost to American taxpayers.
The SPR, stored in underground caverns at four sites on the coasts of Texas and Louisiana, currently holds about 384 million barrels, less than what global consumption represents in four days.
