US loans 45.2 million barrels of strategic reserve oil in first batch since Iran war

[OTTAWA] The US Energy Department said it had awarded contracts to loan 45.2 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) as of Friday (Mar 20).

Companies that have been awarded the SPR contracts include BP Products North America, Gunvor USA, Marathon Petroleum and Shell Trading, the Energy Department said.

The Trump administration is loaning oil from the strategic reserve as part of a wider agreement by countries in the International Energy Agency to release 400 million barrels of crude from reserves in an effort to tame prices that have risen during the US-Israeli war on Iran.

The US is releasing oil in the form of loans that companies will return with extra barrels as a premium, a system the US Energy Department says was meant to stabilise markets “at no cost to American taxpayers”.

The contracts for 45.2 million barrels of oil are from a batch of 86 million barrels of crude oil the Energy Department sought bids for last week. Other companies that have been awarded contracts as of Friday are Energy Transfer Crude Marketing, Mercuria Energy America, Trafigura Trading and Vitol.

The US aims to eventually exchange a total of 172 million barrels from the SPR, and expects oil companies to return about 200 million barrels, including the premium. REUTERS