U.S. seeks to loan about 92.5 million barrels from Strategic Petroleum Reserve

The Trump administration is seeking to loan up to 92.5 million barrels of crude from the Strategic Petroleum Reserve to energy companies as it aims to calm oil markets that have spiked due to the war with Iran, it said on Thursday.

The U.S. agreed in March to loan 172 million barrels from the SPR as part of a wider agreement with more than 30 countries in the International Energy Agency (IEA) to release about 400 million barrels to help relieve markets. Fatih Birol, the head of the IEA, has said the war has led to the worst supply disruption in history.

Until Thursday the U.S. offered 126 million barrels of crude in three batches, but oil companies only took less than 80 million barrels or about 63 per cent of what was offered.

The new offer, if all of it is taken by oil companies, would fulfill the U.S. goal to loan 172 million barrels.

Soaring oil prices are a risk to U.S. President Donald Trump’s fellow Republicans in the November midterm elections.

But prices have risen despite the tapping of reserves. Global oil prices briefly hit a four-year high of more than US$126 a barrel on Thursday on concerns the war could lead to a protracted Middle East supply disruption.

Oil from the SPR is being ​released in loans that companies will return with extra barrels ​as a ⁠premium, a system the Department of Energy says will help stabilize markets “at no cost to American taxpayers.”

The SPR, held in a series of hollowed-out salt caverns at four sites on the coasts of Texas and Louisiana, currently holds nearly 398 million barrels, or about what the world uses in four days.

(Reporting by Timothy Gardner, Katharine Jackson and Ryan Patrick Jones; Editing by Caitlin Webber, Franklin Paul and Keith Weir)