By Timothy Gardner and Katharine Jackson
WASHINGTON, June 5 (Reuters) – Companies that borrowed oil from the U.S. Strategic Petroleum Reserve in recent months will add back an extra 40 million barrels of crude in the form of premiums after the conflict in Iran is over, U.S. Energy Secretary Chris Wright said on Friday in an interview on Fox Business.
Fuel prices have spiked since the U.S.-Israeli war on Iran began in February, but Wright said he is not worried about stock levels in the SPR, which at 357.1 million barrels have sunk to the lowest levels in more than two years.
“I’m not concerned, because we’re not selling any barrels of oil, we’re flowing oil to the marketplace in the short term when it needs it, and we’re trading those barrels,” Wright said on Fox Business’ “Varney & Company” program.
The DOE is loaning about 133 million barrels of oil from the SPR, which is held in underground caverns in Texas and Louisiana, to companies that will repay in crude, with premiums of up to 24%. The department says that system will help stabilize markets at no cost to U.S. taxpayers.
“Each barrel we flow out, we’re getting 1.25 barrels back next year. We’re going to add 40 million barrels to the SPR after this conflict is over, at no cost to the taxpayer, with deals already made,” he said.
The loans are part of a wider deal struck in March with countries in the International Energy Agency to release up to 400 million barrels from international reserves to help calm global oil markets after the closure of the Strait of Hormuz and attacks on energy facilities.
Some 14 million barrels per day of oil have been lost from Gulf producers due to the war and the IEA warned this week that emergency stock releases are temporary and not a solution to supply losses.
(Reporting by Katharine Jackson and Timothy Gardner; Editing by David Ljunggren and Andrea Ricci)
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