The U.S. Energy Department has unveiled plans to loan as much as 10 million barrels of crude oil from its Strategic Petroleum Reserve (SPR) located in Bryan Mound.

The department is set to accept proposals from interested companies until 11 a.m. Central Time on April 6. This initiative is a part of a broader agreement with 32 nations under the International Energy Agency (IEA) to release 400 million barrels of oil from reserves to ease supply pressures instigated by the ongoing war in Iran.

The oil will be loaned to companies, which will then return it with additional barrels as a premium. The Energy Department assistant secretary of hydrocarbons, Kyle Haustveit, stated that this approach would stabilize markets "at no cost to American taxpayers."

SPR Release Fails To Cool Oil Surge

This decision follows the first shipments of crude released from the SPR as part of a targeted 172 million-barrel emergency drawdown. The initial crude shipments began on March 21, the same day the U.S. Department of Energy awarded contracts to eight companies to take 45.2 million barrels of sweet and sour crude from three SPR storage sites-Bayou Choctaw, Bryan Mound, and West Hackberry across Texas and Louisiana.

In March, the IEA announced the largest emergency oil reserve release in its history, totaling 400 million barrels. Despite this historic measure, the market response was muted as the oil prices continued to climb.

As per Goldman Sachs, a 400 million barrel release, even at a record pace of 2-2.5 million barrels per day, would still leave a supply shortfall of over 10 million barrels daily while the Strait is closed. The move represents about 160 days of sustained drawdown rather than a one-time surge in supply.

At 4:55 AM ET, Brent crude oil was trading 7.47% higher at $108.72 per barrel. After taking a brief breather, oil prices jumped as President Donald Trump on Wednesday stated that the military operations in Iran would continue for two to three weeks.