Washington is tapping the Strategic Petroleum Reserve again.
The Department of Energy announced on September 29 that it will offer energy companies loans of up to 40 million barrels of crude oil from the Strategic Petroleum Reserve. The move is the final U.S. batch of a 172-million-barrel commitment made in March as part of a coordinated International Energy Agency release involving about 30 countries and roughly 400 million barrels of emergency petroleum stocks, launched in the wake of the war with Iran.
The crude will come from the SPR's Big Hill and Bryan Mound storage sites on the Gulf Coast. Companies must submit bids by October 6, with deliveries scheduled for November and December.
Because the oil is being loaned, not sold, borrowers must return the crude along with additional "premium" barrels — a structure DOE says puts oil on the market now while rebuilding the reserve later.
"With today's actions, the United States continues to lead the coordinated efforts to stabilize oil markets for the benefit of Americans and people around the world," said Energy Secretary Chris Wright.
The SPR has fallen below 284 million barrels, its lowest level since 1982. Gasoline pump prices are about $4.45 a gallon, up nearly 50% since the war began in late February, while diesel prices have surged about 70% to record levels near $6.50 a gallon.
Wright said the United States and Japan have delivered on their commitments under the coordinated release, while several European IEA members have released only a fraction of what they pledged.