The U.S. Department of Energy announced plans to release more than 53 million barrels of crude oil from the Strategic Petroleum Reserve.
WASHINGTON — The U.S. Department of Energy announced on Monday plans to release more than 53 million barrels of crude oil from the Strategic Petroleum Reserve.
The oil will be released on loan to multiple energy companies in an effort to ease global markets that have been unstable since the U.S. and Israel attacked Iran on Feb. 28, triggering a war and escalating tensions in the Middle East.
The war has already sent the price for a barrel of Brent Crude, the international standard, racing up 50% from pre-war levels of roughly $70 and stoked inflation through the global economy.
The DOE has already loaned about 80 million barrels from the reserve this spring as part of the U.S. pledge to add 172 million barrels total to the international market.
More than 30 countries have pledged oil as well as part of a global initiative to bring roughly 400 million barrels of oil to the world.
One of the key disruptors to the oil market is the effective closure of the Strait of Hormuz, including dueling blockades by the U.S. and Iran, attacks on military and commercial vessels, and the threat of underwater mines. The strait is a vital shipping corridor where 20% of the world’s oil normally flows.
A ceasefire agreement between the two countries that began in April but has been indefinitely extended has hinged on the reopening of the strait, but very little traffic has been able to pass through.
As of Monday, President Donald Trump described the ceasefire as being on “life support” after he rejected Iran’s latest proposal to end the war. That raises the stakes for Trump’s trip this week to China. China is the biggest buyer of Iran’s sanctioned crude oil.
The Associated Press contributed to this report.