Iran's Floating Oil Storage Shrinks to Five-Month Supply Amid US Blockade

Iran's floating oil storage has shrunk to a five-month supply, down from 192 million barrels in mid-April to around 80 million barrels at the end of August. The decline is attributed to China cutting back its Iranian crude purchases and increased GCC oil exports. Analysts estimate that Iran's export reserve afloat will dry up early in the New Year.

The US naval blockade of the Strait of Hormuz has been effective, preventing tankers from exiting the Gulf. As a result, refineries in Iran are being forced to close down and lay off workers. Exports to China, which typically accounts for 90% of Iranian exports, are now being drawn from the existing stockpile held afloat off Malaysia and China.

The US Treasury Secretary's plan to squeeze Iran financially appears to be working, despite some skepticism abroad. The sanctions do not need to be complete to exert decisive pressure on the Iranian regime. With limited trade channels remaining, including routes through Russia and China, the pressure is building for Iran to either escalate the conflict or consider its negotiating position.