US lends oil companies 45.2 mln barrels from reserve, first batch of Iran war

WASHINGTON: The Trump administration said on Friday it has lent 45.2 million barrels of crude oil from the Strategic Petroleum Reserve to oil companies, in an attempt to control prices that have spiked to four-year highs due to the war ‌on Iran.

The ⁠initial ⁠batch covers 52% of the up to 86 million barrels the administration announced last week ​it planned to lend. Ultimately the U.S. aims to lend 172 million barrels for delivery throughout ​this year and into next.

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Companies awarded the initial SPR loans include BP Products North America, Gunvor USA, Marathon Petroleum and Shell Trading, the Energy Department said in a statement.

The loans are part of ⁠an agreement ‌with 32 countries in the International Energy Agency to release ​400 million ​barrels of oil from reserves. The war launched by the ⁠U.S. and Israel on February 28 has pushed crude prices ​to their highest since the start of Russia's invasion ​of Ukraine.

Companies will return the oil with extra barrels as a premium, a system the Energy Department says was meant to stabilize markets "at no cost to American taxpayers." The structure of the swap is unusual in that it required companies to pay a premium of 18% to 22% in oil. ‌Bidders could offer to pay back even more oil in hopes of winning contracts.

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The process will eventually add nearly 10 million ​barrels to the ​SPR for the ⁠first batch, the department said.

Other companies that have been awarded contracts as of Friday are Energy Transfer Crude Marketing, Mercuria Energy America, Trafigura Trading and Vitol.

The SPR, ​held in underground caverns on the Texas and Louisiana coasts, holds about 415 million barrels of crude, more than the world uses in four days.

The U.S. aims eventually to exchange 172 million barrels from the SPR, and expects oil companies to return about 200 million barrels, including the premium.