WASHINGTON: The United States has announced plans to loan 53.3 million barrels of crude oil from its Strategic Petroleum Reserve (SPR) as part of wider international efforts to calm global energy markets shaken by supply disruptions and soaring fuel prices.
The move follows an agreement reached in March between Washington and more than 30 member states of the International Energy Agency (IEA) to collectively release around 400 million barrels of oil into global markets.
The coordinated action came after Iran’s closure of the Strait of Hormuz – one of the world’s most critical maritime oil routes – sharply disrupted energy supplies.
Roughly one-fifth of global oil shipments normally pass through the narrow waterway each day, making any interruption there highly significant for international markets.
The supply shock propelled crude prices sharply higher and added pressure on fuel costs worldwide, particularly in the United States, where motorists have faced rapidly rising petrol prices in recent weeks.
IEA Executive Director Fatih Birol described the ongoing conflict-related disruption as the most severe energy crisis ever faced by the global market, according to Reuters.
Birol said the agency remains prepared to authorise additional releases from emergency reserves if the conflict continues to affect oil supplies.
Speaking on May 7, he noted that member countries had already utilised nearly 20 per cent of their available emergency reserves in efforts to stabilise the market.
In the United States, average petrol prices climbed to $4.52 per gallon on Monday, according to data from the AAA, marking the highest national average recorded since 2022.
Under the latest arrangement, the US Department of Energy (DOE) will provide crude oil to energy companies through a loan mechanism rather than direct sales.
Companies receiving the oil will later return equivalent volumes of crude along with premiums that may reach as high as 24 per cent.
The DOE said the approach is intended to improve market stability while ensuring no financial burden falls on American taxpayers.
The Strategic Petroleum Reserve – the world’s largest emergency crude stockpile – is stored in underground salt caverns located at four sites along the coasts of Texas and Louisiana.
Current reserve levels stand at approximately 384 million barrels, an amount equivalent to less than four days of global oil consumption.
