Iran's oil industry is facing increasing pressure from an American blockade, even as Tehran squeezes global energy supplies through its hold on the Strait of Hormuz. With exports blocked and storage capacity dwindling, Iran may be forced to cut or cease production at some wells within weeks, experts say.
Since the US blockade began on April 13, ships laden with Iranian crude have been unable to leave port. Analysts note that production has already slowed, with storage at Kharg Island, Iran's main export terminal, filling less rapidly than usual. Kpler, a commodities monitoring firm, estimates Iran has about two weeks of storage capacity left, even after reducing output.
Wood Mackenzie, another analysis firm, predicts storage will run out in roughly three weeks. “If the blockade persists, cuts become inevitable,” said analyst Alexandre Araman. Shutdowns lasting more than a month risk long-term damage to Iran's aging oil reservoirs, he added, warning that recovery of older fields “remains uncertain.”
The squeeze comes as the US Treasury intensifies sanctions on Iranian oil shipments at sea, and the US military has seized at least two tankers off Asia believed to be carrying Iranian oil. Iran's leaders are resisting shutting wells due to long-term consequences, said Miad Maleki, a former Treasury sanctions expert. “Those oil wells are not maintained well,” he noted, adding that once shut, they won't easily “snap back after a few months.”
Iran had been pumping over 3 million barrels of crude daily before the war, with over half for domestic use. The blockade is also exacerbating global shortages of jet fuel and rising gasoline prices. While President Donald Trump has claimed Iran is in a “state of collapse,” analysts say the situation, though severe, is not yet at that point.
