53.3 million barrels of oil will be borrowed by the US from its reserves
As part of a global deal to stabilize oil prices, which have increased as a result of the U.S.-Israeli trade war with Iran. The Trump administration announced that it will lend energy corporations 53.3 million barrels of crude oil from the U.S. Strategic Petroleum Reserve (SPR).
Only roughly 58% of the 92.5 million barrels that the Department of Energy (DE) offered to lend from the SPR last month were borrowed by nine businesses. Including Exxon Mobil, Trafigura, and Marathon Petroleum Company.
With the intention of releasing 172 million barrels in total, the DE has already borrowed roughly 80 million barrels from the SPR this spring.
As part of an agreement with over 30 nations in the International Energy Agency (IEA) to release roughly 400 million barrels. The United States consented to this higher amount in March. The pact aimed to mitigate the increase in fuel and oil costs brought on by Iran’s blockade of the Strait of Hormuz. A vital route that saw the daily passage of almost 20% of the world’s oil.
Biggest energy crisis in history
Fatih Birol, the IEA’s managing director, stated that the war has triggered the biggest energy crisis in history. If supply disruptions stemming from the conflict persist, the IEA is prepared to release additional oil from its strategic reserves, Birol declared on May 7. So far, member countries have released 20% of their available reserves, he added.
The soaring fuel prices pose a risk to Republicans, the party of President Donald Trump, who are hoping to maintain their slim majority in the U.S. Congress in the November midterm elections.
On Monday, the average price of gasoline in the United States reached $4.52 per gallon, the highest level since 2022, according to data from the American Automobile Association (AAA).
Currently, the SPR has around 384 million barrels, which is less than what the world uses in four days. The SPR is kept in caves at four locations along the coasts of Texas and Louisiana.
