Gasoline prices soar! On Monday, the U.S. once again released a large amount of strategic oil reserves to cope with the summer peak.

Gasoline prices soar! On Monday, the U.S. once again released a large amount of strategic oil reserves to cope with the summer peak.

The United States is tapping its Strategic Petroleum Reserve at a near-record pace to counter soaring oil prices triggered by the war in Iran and the resulting pressure on gasoline prices.

On Monday, May 11, the U.S. Department of Energy announced that this round of Strategic Petroleum Reserve (SPR) auctions awarded a total of 53.3 million barrels of crude oil, with buyers including oil trader Trafigura Group, U.S. refiner Marathon Petroleum Corp, and ExxonMobil, among others.

This release will be brought to market in batches from June to August, coinciding with the peak U.S. summer driving season and rising gasoline demand. Currently, the average price of regular gasoline in the U.S. has surpassed $4.50 per gallon, marking the first time since July 2022 that this level has been reached.

Meanwhile, on Monday, Trump said he would seek to suspend the federal gasoline tax of 18.4 cents per gallon "until the time is right." According to independent budget analysts, this move would result in billions of dollars in monthly tax revenue losses.

This Auction Marks SPR's Second Largest in History

According to the Department of Energy, in this round of 53.3 million barrel auctions, Trafigura received the largest allocation, nearly 13 million barrels, followed by Marathon Petroleum and ExxonMobil.

This auction is SPR's second largest single sale ever and is part of an international initiative led by the International Energy Agency to lower global oil prices.

Last week, as part of this initiative, the U.S. released a record 1.22 million barrels of oil per day.

According to Bloomberg data, in the week ending May 8, SPR inventory dropped by about 8.6 million barrels to approximately 384.1 million barrels, breaking the previous record of an 8.4 million barrel single-week decline set on September 9, 2022. Among them, sour crude inventory decreased by about 5.6 million barrels and sweet crude inventory by about 3 million barrels.

Furthermore, the Trump administration has committed to releasing a total of 172 million barrels via a "swap program," lending crude oil to companies who must return the oil in-kind at a later date.

So far, the Department of Energy has agreed to release a cumulative total of 133.1 million barrels, leaving a gap of about 39 million barrels to reach the 172 million barrel target. It remains unclear whether the Department of Energy will conduct additional auctions to fill this gap.

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