Iran's Disappearing Oil Creates Global Supply Crunch

Iran's oil exports have been severely impacted by the ongoing US blockade, which has led to a significant reduction in shipments. According to data, loadings at Kharg Island, Iran's main export terminal, collapsed from 1.8 million b/d in March to 260,000 b/d in May.

Although a June 17 memorandum allowed Iranian cargoes to pass for 60 days, the reprieve expired in August, and shipments slumped again to 250,000 b/d. The situation worsened in September, with no Iranian loadings observed in the Gulf.

China's recovery is being hindered by the loss of its main oil supplier. Chinese crude imports fell from 11.5 million b/d in February to 7.24 million b/d in August and then rose slightly to 7.5 million b/d in September.

The consequences of Iran's disappearing oil are far-reaching, affecting not only China but also other buyers who must now compete for increasingly expensive alternatives. The situation is further complicated by the fact that Iran still has around 86 million barrels on the water, with 23 million barrels trapped inside the Gulf.