The US has awarded contracts to loan 45.2 million barrels of crude from its strategic reserve, the first major release since the war with Iran began.

WASHINGTON: The US Energy Department has awarded contracts to loan 45.2 million barrels of crude oil from the Strategic Petroleum Reserve. This marks the first significant release from the strategic stockpile since the onset of the US-Israeli war with Iran.

Companies receiving the contracts include BP Products North America, Gunvor USA, Marathon Petroleum and Shell Trading. Other awarded firms are Energy Transfer Crude Marketing, Mercuria Energy America, Trafigura Trading and Vitol.

The action is part of a wider International Energy Agency agreement to release 400 million barrels of crude from global reserves. The collective effort aims to tame prices that have surged during the conflict.

The US is releasing oil in the form of loans that companies will later return with extra barrels as a premium. The Energy Department stated this system is meant to stabilise markets “at no cost to American taxpayers.”

The 45.2 million barrels are from a batch of 86 million barrels the department sought bids for last week. The US aims to eventually exchange a total of 172 million barrels from the SPR.

Officials expect oil companies to return about 200 million barrels, including the premium. This process is designed to replenish the national reserve with additional oil over time.

 The Sun Malaysia