US Blockade Squeezes Oil Exports from Iran

The United States naval blockade of Iran has achieved what years of sanctions failed to do: severely curtailing Tehran's oil exports.

For the first time on record, Iran has gone about seven weeks without shipping meaningful crude through the Strait of Hormuz. According to Kpler and Vortexa estimates, Iranian crude exports have plummeted from 740,000 barrels per day in July to around 220,000-255,000 bpd in August.

The blockade's impact is evident in Iran's dwindling foreign-currency earnings, which could force the government to finance spending by printing money and risk even higher inflation. The International Monetary Fund estimates Iran's inflation rate at nearly 70% this year, the world's third-highest after Venezuela and Sudan.

Kpler analyst Homayoun Falakshahi warned that Iran may struggle to replenish its floating storage in Asia, as no fresh crude supplies are arriving due to the blockade. With 29 tankers inside the strait carrying 36.11 million barrels of crude, TankerTrackers.com co-founder Samir Madani noted that Iranian crude remains openly available, but for how long?

Vortexa's Claire Jungman observed that even at the height of maximum-pressure sanctions in 2019-20, some Iranian crude cleared Hormuz every single month. In contrast, the current blockade has brought outbound flows to near-zero for a sustained stretch since mid-July.