️ The US naval blockade of Iranian ports and the Strait of Hormuz, in place since April 13, has raised concerns that Iran could run out of crude oil storage capacity and be forced to curb production, according to multiple analysts.
️ Bloomberg reported Tuesday that data from analytics firm Kpler suggests Iran could exhaust its storage in 12 to 22 days if the blockade persists. Last week, US Treasury Secretary Scott Bessent claimed that storage at Kharg Island, Iran's main export hub, would be full “in a matter of days.”
️ The Strait of Hormuz, a narrow channel connecting the Gulf to the open ocean, sees 20% of the world's oil and LNG shipments during peacetime. Two days after US and Israeli airstrikes on Iran began on February 28, a senior IRGC adviser announced the strait was “closed,” threatening to set any vessels ablaze.
️ Iranian First Vice President Mohammad Reza Aref stated on April 19 that “the security of the Strait of Hormuz is not free,” adding: “The choice is clear: either a free oil market for all, or the risk of significant costs for everyone.”
️ Since the blockade began, the US has fired on and seized an Iranian-flagged tanker near the strait and redirected vessels carrying cargo to or from Iran. Iran's armed forces denounced these actions as “piracy.”
️ Iran, the third-largest OPEC producer, exports 90% of its crude via Kharg Island. It exported 1.84 million barrels per day (bpd) in March and 1.71 million bpd in April, but most exports are now being stored due to the blockade.
️ Satellite data shows Iran's oil stocks rose by over 6 million barrels from April 13-21, with Kharg Island's storage at about 74% capacity as of April 20. Typically, companies avoid exceeding 80% capacity, though Iran reached 90% during the COVID-19 pandemic. Floating storage on tankers adds about 127 million barrels of capacity.
️ Kpler senior analyst Muyu Xu told Al Jazeera that the blockade could eventually force production cuts, but with onshore storage covering roughly 20 days of current output, any reduction would be gradual, accelerating into May.
️ CGEP analyst Antoine Halff argued that Iran might halt production “more by choice than by necessity,” preserving spare capacity for a smoother restart once the blockade eases. However, shutting wells risks damaging underground reservoirs, and restarting is slow and costly.
️ Analysts noted that Iran can continue earning revenue from oil already in transit – currently 160-170 million barrels on ships worldwide – for several months, even without new exports under the blockade.
Source: www.aljazeera.com