US Blockade Drains Iran's Last Floating Oil Reserves

The US naval blockade on Iranian oil exports has been in place for 10 weeks, effectively preventing any Iranian or dark fleet tanker from leaving the Gulf. During a brief summer hiatus, Iran managed to ship out a stockpile of oil held afloat in the Gulf, restocking reserves mostly off Malaysia. However, since then, Iran has only been able to meet demand from its primary customer, China, by selling from these floating reserves.

According to Kpler, at the beginning of October, Iran had about 15 million barrels of oil left in its floating reserves. This stock is expected to be depleted by mid-October, although some believe it may last a little longer. Regardless, the remaining sales must be invoiced within two months, meaning Iran will lose a significant revenue stream by the end of December. This revenue has historically accounted for about 40 percent of government finance.

The loss of this income will not immediately topple the regime, but it will prioritize national security spending, such as rebuilding the nuclear program and funding internal security forces. Ordinary Iranians will bear the brunt of the economic strain, facing power and fuel shortages, reduced food imports, and potential industrial action due to unpaid wages. With inflation running at around 90 percent, many will struggle to afford basic necessities.

Protests over the cost of living and lack of essentials may become more common, with security forces potentially sympathizing with the demonstrators. Analyst Homayoun Falakshahi of Kpler cautions that any talk of productive negotiations should be viewed skeptically until there is concrete action, such as asset releases or blockade easing.