This article was originally published by The Lever, an investigative newsroom. If you like this story, subscribe to The Lever today .
Weeks after he launched his war with Iran, President Donald Trump began releasing millions of barrels of oil from the nation’s strategic reserve to combat skyrocketing gas prices. But instead of selling the reserve’s crude oil on the market, as presidents normally do, Trump gave out unprecedented crude oil loans to at least 10 companies that have political connections to the president — a move that could rob taxpayers of billions in revenue.
The deals would allow these companies, rather than taxpayers, to potentially profit off of 133 million barrels of crude oil they have borrowed from the national stockpile since March, all of which were acquired and stored on the government’s dime. The hefty loans could divert much-needed funding for upgrades to the reserve’s physical infrastructure.
This comes as Trump is fighting to keep the American economy afloat after he, alongside Israel, started bombing Iran in February. Since then, fuel prices, which underpin much of the cost of food and common household items, have skyrocketed. The national average for a gallon of gas before the Iran war was $2.98 ; in May, it spiked to $4.56 .
To combat high gas prices, presidents tap into the Strategic Petroleum Reserve, a federal program designed to hold and release oil in case of supply disruption. For example, in 2022 the Biden administration sold 180 million barrels of crude oil from the reserve to offset rising fuel costs associated with Russia’s invasion of Ukraine.
These companies just have to return the oil, plus a premium, to the national stockpile.
Trump criticized the Biden administration’s decision at the time, falsely claiming that he filled the reserve to 100% capacity during his first term. But the reserve is now at its lowest levels in more than four decades, and the infrastructure supporting the reserve is at risk of failing. A May report from the Government Accountability Office, a federal watchdog agency, found that the reserve is being held together by “Band-Aids,” and that it is “uncertain how long [the infrastructure] will hold.”
Traditionally, when the federal government releases crude oil from the Strategic Petroleum Reserve, it sells it on the market and then repurchases it at a later date. This tactic, usually deployed in times of oil price spikes, can net taxpayers millions, if not billions, if the oil is repurchased at a lower price — returns that can be used for other purposes, such as managing the federal budget or infrastructure upgrades at the reserve.
However, instead of selling the oil, the Trump administration decided to offer loans to various oil companies and commodities trading companies. Such loans have happened in the past; when Hurricane Katrina struck the Gulf Coast in 2005, President George W. Bush lent 9.8 million barrels of oil to refineries whose supplies were disrupted. But it’s never occurred on such a large scale as today, said Hal Connolly, an energy and transportation expert.
Since March, the Trump administration has awarded more than 133 million barrels of crude oil from the reserve to 13 companies, 10 of which have direct political connections to Trump. The 10 companies include Exxon Mobil, Shell, BP, Marathon, Phillips 66, petroleum refiner Alon USA, oil and gas infrastructure company Energy Transfer and the commodity trading companies Vitol, Mercuria and Trafigura.
The companies did not respond to a request for comment.
Now, these companies just have to return the oil, plus a premium, to the national stockpile — allowing private companies, and not the federal government, to reap the rewards of selling high and buying low.
“In 2022, the government sold high and bought low for the benefit of taxpayers. In 2026, it let private companies run that trade with public oil,” Connolly told The Lever. “If oil returns to its prewar price, or even below that, companies could make hundreds of millions to billions replacing oil that belonged to the public.”
Sell high, buy low
When Biden began selling 180 million barrels from the reserve back in 2022, Trump criticized it as a “futile attempt to reduce oil and gasoline prices.” Trump and his administration officials have since changed their tune about drawing from the reserves. The Energy Department, which manages the reserve, claimed in a March press release that its plan to lend the oil instead of selling it would allow it to more quickly replace the oil and to increase the amount of oil stored at the reserves.
“Unlike the previous administration, which left America’s oil reserves drained and damaged, the United States has arranged to more than replace these strategic reserves with approximately 200 million barrels within the next year — 20 percent more barrels than will be drawn down — and at no cost to the taxpayer,” the Energy Department wrote.
But the “no cost to the taxpayer” claim is misleading. The Department of Energy told Reuters in 2024 that the Biden-era oil sales ultimately generated a $3.5 billion profit. Connolly said that the current loan scheme is a way for the Trump administration to avoid the same criticism that Trump levied against Biden.
The “no cost to the taxpayer” claim is misleading.
“The loan structure looks like a way to tap the reserve without an outright ‘sale’ [the Trump administration] could be attacked for, while giving up the buy-low sale captured for taxpayers in 2022,” he said. As he put it in a Substack post , “‘No cost to taxpayers’ is only true if you ignore the billions taxpayers earned running this exact trade themselves four years ago.”
The Energy Department has issued five rounds of loans from the reserve since March, with the most recent loan taking place on June 22, federal data shows. Connolly said that the early deals were the most lucrative for the private sector because the companies were able to sell the oil at wartime prices, higher than $90 a barrel. As prices have dropped, companies have been less interested in the loans.
“In the first four rounds, when oil was high, companies subscribed to 133.6 million barrels,” Connolly wrote in an analysis. “In June, with oil down near $70 and the spread mostly gone, the Energy Department offered up to 40 million more barrels. The industry took 500,000, barely one percent, [in] a single small bid from Vitol.”
While companies must replace the lent oil plus an interest-like premium of extra crude, as long as the spread between the companies’ selling and repurchasing prices is large enough, the firms can make a handsome profit.
For example, companies that borrowed oil during the first round of loans are required to contribute an extra 21.6% of crude as part of their repayment. But according to Connolly, if the firms sold that borrowed oil when prices topped $95 a barrel in late March and then replenished the petroleum reserve with oil they purchased when prices dropped to $70 a barrel — as it did in late June — 10 of the 13 companies would still profit from the loans.
Source: Hal Connolly
However, Abhi Rajendran, a nonresident fellow at the Baker Institute’s Center for Energy Studies at Rice University, said that the loans could be a way to stimulate economic activity in the oil and gas sector, and the reserve is there to stabilize gas prices.
“You have to kind of incentivize the market for [these companies] to take [the oil] and profit from it to some degree,” he told The Lever. “In theory, it’s great if you fill up the [reserve] when oil is cheap, and you draw it down when it’s expensive … but [the reserve] is not really a mechanism for the U.S. government to make money off of.”
“The choice was never between this program and nothing.”
The companies could end up losing money if they repurchase the oil when prices are high (on July 23, oil prices briefly topped $100 a barrel amid renewed hostilities in the Middle East). But oil prices are expected to drop over the long run, thanks to new oil production ramping up in Venezuela, the potential reopening of the Strait of Hormuz and China’s growing electric vehicle market.
The companies must repay the oil loans evenly over a set period of time. For oil lent out during the first phase, companies must replace the crude over a 23-month window that begins in November and ends in September 2028. All of the 133 million barrels that have been lent out must be replaced by 2029.
This gives all of the companies ample time to arrange favorable deals to replace the oil in a way that ensures a profit.
“The choice was never between this program and nothing. It was between lending the oil and selling it,” Connolly wrote. “Selling would have put the wartime price in the Treasury’s hands and let the government buy back cheap oil later, capturing the drop in cash for taxpayers.”
Political pipelines
Energy Transfer, a Dallas-based oil and gas transportation and storage company that borrowed 2.5 million barrels from the petroleum reserve since the administration began offering loans, has been especially generous to Trump. Since 2025, the company and its executive chairman, Kelcy Warren, have donated $25 million combined to MAGA Inc., the Trump-connected super PAC.
Warren has been one of Trump’s most prolific donors, giving at least $14.5 million to the president’s election efforts since 2016. In 2024, Warren also co-hosted a campaign fundraising event for Trump in Houston.
Energy Transfer has already netted several victories during Trump’s second administration. On his first day back in office, Trump ended a Biden-era pause on liquefied natural gas exports, a crucial move for an Energy Transfer project. In May 2025, the Federal Energy Commission granted a three-year extension for the company to finish its liquefied natural gas project, and Warren’s personal net worth grew by roughly 10% the following week.
Now, according to Connolly’s calculations, if oil eventually drops to the prewar prices of $60 a barrel, Energy Transfer stands to make $28 million on its loans from the petroleum reserve.
Source: Hal Connolly
Other companies receiving oil loans with Trump connections include BP , Exxon Mobil , Mercuria and Shell . Exxon Mobil donated more than $66,000 to Trump’s reelection efforts since 2024, gave $1 million to his inauguration fund, and its chief executive attended White House meetings on Venezuelan oil production. Mercuria also donated $1 million to Trump’s inauguration fund and was selected to be a member of a $10 billion critical minerals stockpile project. BP and Shell donated $500,000 to Trump’s inauguration fund.
“It’s not a smart move if you have the taxpayer in mind.”
If oil prices return to the prewar prices, BP, Exxon Mobil, Mercuria and Shell stand to make $142 million, $81 million, $56 million, and $417 million, respectively, according to Connolly.
Other petroleum borrowers also have Trump connections. A senior trader for Vitol gave $6 million to Trump-aligned political action committees. Executives for Marathon and Phillips 66 have attended White House meetings, and the founder of Delek, the parent company of Alon USA, is a routine GOP donor. Last year, Delek received a lucrative environmental protection exemption , which cut company compliance costs by $280 million.
If oil drops to prewar prices, Trafigura, a Singaporean commodities trading company, stands to make a whopping $450 million from the 34.3 million barrels of oil it borrowed. While the company hasn’t donated directly to Trump, it is still tied to his administration. The firm is currently facing Senate scrutiny over a deal brokered by Trump officials that would allow the company to purchase 1,000 kilograms of Venezuelan gold and sell it in the United States. The Venezuelan state-owned mining company at the center of the deal has been sanctioned in the past for its connections to known terrorist regimes.
All of these oil deals, which seem to favor the private sector, make little sense for the federal government, said Connolly.
“It’s not a smart move if you have the taxpayer in mind,” he said.
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Trump’s Iran Oil Giveaway
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