The U.S. administration said on Monday it will loan 53.3 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) to energy companies as part of an international effort to steady markets shaken by the U.S.-Israeli conflict with Iran.
Nine energy companies - among them Exxon Mobil, Trafigura and Marathon Petroleum Company - accepted loans that amount to roughly 58% of the 92.5 million barrels the Department of Energy (DOE) had offered to lend last month.
The DOE has previously loaned about 80 million barrels from the SPR earlier this spring and has indicated an objective of releasing a total of 172 million barrels. That volume corresponds to the U.S. portion of a March agreement with more than 30 International Energy Agency (IEA) member countries to free about 400 million barrels worldwide.
Officials say the coordinated release is intended to blunt oil and fuel price increases that followed Iran's closure of the Strait of Hormuz - a chokepoint that ordinarily handles about 20% of global oil transport on a daily basis.
Fatih Birol, head of the IEA, has characterized the conflict as producing the largest energy crisis on record. On May 7, Birol said the IEA stands ready to release additional oil from strategic reserves if disruptions to supply continue. To date, member countries have released 20% of available reserves, according to Birol.
Market participants receiving SPR loans will return the crude under terms set by the DOE, and the U.S. action is part of the broader international coordination intended to address near-term market strain. The loans add to prior SPR activity this spring and form the U.S. contribution to the multilateral release agreed in March.
Context and next steps
The DOE’s stated plan to reach 172 million barrels in U.S. releases is a direct implementation of the multilateral March commitment. The IEA has signaled readiness to deploy further reserve volumes should supply disruption persist, and member nations have already tapped a portion of their reserves.