The US government said that oil companies agreed to borrow about 40 million barrels from the strategic oil reserve, which is the last installment of the US share within the framework of a global agreement aimed at controlling fuel prices after the United States and Israel launched the war on Iran.
The Ministry of Energy said, on Thursday evening, that it had awarded contracts on October 28 for about 16.8 million barrels. She added in a statement that the companies that will borrow oil include “Ginvor,” “Trafigura Trading,” “Vitol,” and “Philips 66.”
The United States offered 17 million barrels of strategic oil reserve on October 16.
The Ministry granted 23.8 million barrels on the 13th of this month to companies including Exxon Mobil, Atlantic Trade and Marketing, and Macquarie Commodity Trading.
In March, Washington agreed to lend 172 million barrels of strategic oil reserves as part of a broader agreement with about 30 member states of the International Energy Agency to withdraw 400 million barrels of reserves worldwide.
The heavy reliance on the strategic oil reserve causes it to lose part of its ability to calm the markets. The administration of President Donald Trump resorted to this reserve after the administration of former President Joe Biden sold large quantities of the strategic reserve following the Russia-Ukraine war in 2022. It is currently at its lowest levels since 1982.
Instead of selling oil, the Trump administration lends crude and charges interest in the form of a barrel of oil. The administration said that this would add 44 million barrels to the borrowed quantities that will begin to be returned to the Strategic Oil Reserve early next year.
Data from the European Statistical Office (Eurostat) showed, on Friday, that the euro zone economy grew at a faster pace than expected during the third quarter, maintaining its ability to withstand the pressures resulting from rising energy prices, supported by continued investment and consumption.
Economic growth slowed to 0.4 percent during the third quarter, compared to strong growth of 0.6 percent during the second quarter, but it exceeded the 0.2 percent expectations of economists polled by Reuters.
On an annual basis, the euro zone economy expanded by 1.3 percent, exceeding expectations of 1.1 percent, and approaching the level of potential growth, which is the rate that the economy can achieve without the need for stimulus.
Among the largest Eurozone economies, the German economy recorded growth of 0.2 percent on a quarterly basis, while the Spanish and Dutch economies grew by 0.6 percent each, while the Italian economy recorded no growth, and the French economy contracted by 0.1 percent.
Although the euro zone's growth rate is less than half that of the US economy, the data is still much better than the pessimistic expectations that prevailed following the outbreak of war with Iran earlier in the year.
Europe is a net importer of energy, which makes the rise in oil prices quickly reflect a decline in growth, put pressure on companies’ profit margins, and lead to a deterioration in the region’s terms of trade.
But the euro zone performed better than expected in light of the uncertainty, as large spending on artificial intelligence, defense and infrastructure contributed to boosting investment, and strong external demand helped support the industrial sector, while families continued to spend, which led to a decline in their saving rate, which was already high.
This led to a series of upward revisions to growth expectations during the year, as most analysts now expect the economy to expand by more than 1 percent during the current year, with growth accelerating in 2027.
However, Friday's data was somewhat influenced by the Irish economy's exceptional growth of 5.5 percent quarter-on-quarter, a rate large enough to raise the euro zone's overall growth reading significantly.
Ireland's GDP is characterized by exceptional fluctuations, due to the presence of a large number of multinational companies, especially pharmaceutical companies, which have chosen the country as their headquarters for tax reasons.
Despite the ability of the eurozone economy to withstand this year, some parties, including the European Central Bank, fear that these favorable conditions will end soon.
Borrowing costs have risen sharply globally over the past two months, which will slow economic growth inside and outside the region.
In addition, renewed rising energy costs will put pressure on economic output, and household confidence may even fade as natural gas prices jump to their highest levels since the outbreak of the Russian war in Ukraine in early 2022.
This new jump in energy prices is likely to prompt the European Central Bank to raise interest rates again, perhaps as early as December, which will slow growth further.
Oil prices rose at the beginning of Friday's trading session due to concerns about supply shortages, with prices heading towards achieving gains for the fourth month in a row, the largest since July.
By 01:22 GMT, Brent crude futures rose 86 cents, or 0.75 percent, to $115.74 per barrel. US West Texas Intermediate crude futures increased 72 cents, or 0.71 percent, to $102.72.
On a monthly basis, Brent crude is heading to achieve gains of approximately 14 percent and US crude 15 percent, to conclude the month’s trading above $100 for the first time since April.
On Thursday, the Saudi-led coalition announced the interception of a cruise missile launched by the Houthis towards the western region of the Kingdom.
“The continuation of military operations in the Strait of Hormuz, amid doubts about the existence of a viable diplomatic path, keeps oil prices high in anticipation of an escalation of the conflict in the coming weeks,” said Sol Cavunich, head of energy research at MST Markey, according to Reuters.
US President Donald Trump said on Thursday that his Vice President, J.D. Vance, had contacted Iran to help it obtain medical supplies, after American media reported that Vance had contacted the highest security official in Tehran to revive talks to stop the war.
Iran said that three tankers collided with naval mines, exploded and caught fire, while trying to sail on an unauthorized route south of the Strait of Hormuz.
