Iran's Oil Exports Plunge as US Naval Blockade Tightens

Iran's oil export revenue is rapidly dwindling as a US naval blockade restricts shipments from the Persian Gulf and offshore stockpiles feeding China dwindle, exacerbating economic pressures on Tehran. Since the blockade was reinstated in mid-July by the US Navy, no Iranian crude has crossed it, according to ship tracker Kpler.

The volume of Iranian crude already on vessels outside the blockade, a reserve that still generates revenue for Tehran, has dropped to around 29 million barrels from approximately 90 million barrels in mid-July and could be depleted by next month, according to Kpler. Gulf oil officials reported finding few Iranian cargoes changing hands.

The oil squeeze is depriving Tehran of its primary source of foreign currency as the value of the Iranian rial plummets, inflation soars, and the economy plunges deeper into crisis. Hamad Hussain, an economist at Capital Economics, said: 'Now, much will depend on the degree of economic pain that the Iranian regime is willing to bear to achieve its military and geopolitical objectives.'

Roughly a third of Iran's state budget typically comes from oil revenue, which also directly finances the regime's military. The US Treasury says armed forces, including the Islamic Revolutionary Guard Corps, utilize dedicated companies and shadow-fleet networks to sell crude and supplement their budgets.