The Trump administration started the process of a mammoth drawdown of the US emergency oil reserve, issuing a request to exchange 86 million barrels of crude oil.
Deliveries from the Strategic Petroleum Reserve, part of a massive 172 million barrel release announced Wednesday, are expected to begin moving to market by the end of next week, the Energy Department said in a statement Friday.
The release, which is expected to take four months to complete, is part of a 400 million barrel effort coordinated with other nations aimed at lowering crude, gasoline, diesel and jet fuel prices that have climbed dramatically since the US-Israel invasion of Iran.
The war has brought shipping traffic to a virtual standstill in the Strait of Hormuz, through which roughly a fifth of the world’s oil flows.
It has also political pressure on President Donald Trump to address rising fuel costs prior November’s midterm elections.
Under the terms of the exchange, companies will return the borrowed oil to Energy Department with additional barrels as a premium. Bids for the solicitation are due no later than 5 p.m. CT on March 17, the department said.
The Trump administration has arranged to replace the withdrawn oil with about 200 million barrels within the next year, the Energy Department said earlier this week, adding it would be 20% more than what would be drawn down.
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