US lends oil companies 45.2 million barrels from reserve

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 per cent of the up to 86 million barrels the administration announced last week it planned to lend. Ultimately, the US aims to lend 172 million barrels for delivery throughout this year and into next.

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 US 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 stabilise 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 per cent to 22 per cent in oil. Bidders could offer to pay back even more oil in hopes of ​winning contracts.

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