The US Energy Department has announced it would loan 13.4 million barrels of crude oil from the Strategic Petroleum Reserve as part of renewed efforts by the Biden administration to contain rising oil prices that have soared to the highest point since 2014.
According to the Energy Department, the SPR oil would be awarded to 7 companies. It would be the second largest release of oil from the US strategic stockpile, bringing the total amount of the commodity released from the cache to nearly 40 million barrels.
The release is a part of a November 2021 plan by US president Biden to release 50 million barrels of CPR oil in a move coordinated with India, Japan, South Korea, and China to bring down the oil prices.
Currently, oil prices in the US are higher than in October, when the Biden administration unveiled the SPR oil release plan. The price of West Texas Intermediate gained more than 13% this year alone, as demand recovery has outpaced available supply.
Surging fuel prices risk the US economic recovery and create political risks for the Biden presidency, as well as the ability of Democrats to retain control of Congress in elections later this year. Last week, Biden pledged to continue his efforts to lower the oil prices.
OPEC and its allies are not meeting monthly quotas that were part of a plan to boost production. Some of its members, such as Libya, Nigeria and Kazakhstan, have endured setbacks from unrest that had disrupted output.
Prior to today's award, the agency had granted over 8 million barrels of strategic reserve oil as part of the exchange program that had offered a total of 32 million. Awardees of this program are expected to return the barrels during 2022-2024.
Awardees in the latest exchange round include:
Shell Trading US Co. (4.2 million barrels),
Trafigura Trading LLC (3 million barrels),
Phillips 66 Co. (2.3 million barrels),
Macquarie Commodities Trading SA (2 million barrels),
Chevron Corp. (0.885 million barrels),
ExxonMobil Oil Corp. (0.515 million barrels,)
BP Products North America Inc. (0.5 million barrels).
Current SPR oil loans are listed in the table below:
