MONTREAL (Oil Monster): The U.S. government is offering energy companies access to up to 40 million barrels of crude oil from the Strategic Petroleum Reserve, completing the final U.S. portion of a coordinated international emergency release launched following the war with Iran.
The Department of Energy announced the new exchange solicitation on September 29, 2026. Companies have until October 6 to submit proposals, with deliveries scheduled for November and December.
Washington agreed in March to make 172 million barrels available from the SPR as part of a broader International Energy Agency initiative involving approximately 30 countries and a combined commitment of about 400 million barrels of emergency petroleum stocks.
The latest solicitation covers the remaining U.S. portion of that commitment.
The crude will come from the SPR's Big Hill and Bryan Mound storage sites on the U.S. Gulf Coast.
Energy Secretary Chris Wright said the United States and Japan have delivered on their commitments under the coordinated action, while saying several European IEA members have released only a portion of the crude oil and petroleum products they had pledged.
The latest solicitation follows an earlier attempt to place the remaining barrels into the market.
In June, the Energy Department offered up to 40 million barrels under the same coordinated release program. Companies ultimately agreed to borrow only about 500,000 barrels, according to Reuters.
The limited uptake illustrated an important distinction between barrels being offered from the reserve and the amount companies ultimately choose to borrow.
The new solicitation gives refiners and other eligible companies another opportunity to access the remaining crude as global oil and fuel markets continue to respond to Middle East supply disruptions.
The additional offer comes as U.S. strategic crude inventories have fallen below 284 million barrels, their lowest level since 1982.
The reserve has been drawn down substantially during recent global supply disruptions, including releases following the Iran conflict and earlier withdrawals after Russia's invasion of Ukraine in 2022.
ALSO READ:
U.S. Oil Reserve Falls Below 300 Million Barrels, Lowest Since 1983
Further withdrawals could temporarily bring the reserve closer to a statutory threshold governing certain limited drawdowns.
U.S. law restricts routine limited drawdowns once the SPR falls below 252.4 million barrels. The restriction does not eliminate broader emergency authorities available in the event of a major energy supply disruption or to meet U.S. international energy obligations.
The threshold therefore does not represent a hard minimum below which the reserve can never fall. Instead, it limits one category of smaller discretionary drawdowns.
The latest release is structured as an exchange rather than an outright sale.
Companies that receive SPR crude must repay the government in oil at a later date and provide additional barrels as a premium.
The Energy Department said previous exchanges have generated substantial premiums in returned crude. Reuters reported that premiums under the program have reached as high as 24% for some transactions.
Repayment of all barrels associated with the current exchange program is not expected to be completed until late 2028.
DOE says the exchange structure allows crude to enter the market during periods of disruption while ultimately returning additional barrels to the reserve without requiring taxpayers to fund the replacement oil.
The latest SPR action comes as U.S. gasoline and diesel prices remain elevated following disruptions to global crude and refined-product markets.
Reuters reported gasoline prices around $4.45 per gallon and diesel near record levels of about $6.50 per gallon as of late September.
The administration has faced pressure over rising fuel costs ahead of the November midterm elections. Separately, Reuters reported that the White House has urged European Union countries to consider drawing down emergency diesel inventories as policymakers look for additional ways to increase supply.
ALSO READ:
Oil Prices Rise as Trump Rejects Iran Proposal
Companies have until 11 a.m. Central Time on October 6 to submit bids for the latest SPR exchange.
The amount ultimately awarded will be important because the previous 40-million-barrel solicitation generated demand for only a small portion of the barrels offered.
Any awarded crude is scheduled for delivery during November and December 2026.
Sources: U.S. Department of Energy; Reuters.
Courtesy: www.reuters.com
