US Blockade Tests Iran's Oil Export Resilience

The US has imposed a blockade on Iran's ports, blocking shipping in and out of the country. This move could prevent around 2 million barrels per day (bpd) of Iranian crude from reaching its main buyer China.

Analysts say that Iran can withstand a complete halt in oil exports for up to two months before being forced to curb production. In this scenario, they estimate Iran could sustain current production levels of around 3.5 million bpd for about two months without exports, extendable to three months with a modest 500,000 bpd production cut.

FGE NextantECA estimates that Iran has approximately 90 million barrels of available onshore crude storage capacity, out of a total capacity of around 122 million barrels. Energy Aspects, however, assumes significantly lower available onshore storage at about 30 million barrels, based on data from Kayrros.

Richard Bronze, co-founder of Energy Aspects, said that the blockade may not have a significant impact on Iranian production in April but if it continues into May, output would need to be reduced substantially. He also noted that Iran will likely deploy available oil tankers in ports as floating storage, delaying production cuts.