The blockade, which took effect on April 13, has left Tehran trying to manage a pressure campaign aimed at its most important source of revenue. Bloomberg said the war has entered a stalemate, with Washington betting that lost oil revenue will force Iran to yield and Tehran betting it can outlast the economic pain and keep global energy prices elevated.
A senior Iranian official told Bloomberg that Tehran is proactively reducing crude output to stay ahead of storage limits rather than waiting for tanks to fill completely. The official said the move could affect as much as 30% of Iran’s oil reservoirs, but argued the risks were manageable because Iranian engineers have years of experience idling and restarting wells under sanctions.
“We have enough expertise and experience,” said Hamid Hosseini, a spokesman for the Iranian Oil, Gas and Petrochemical Products Exporters’ Association. “We’re not worried.”
Bloomberg said Iran’s oil sector had remained resilient before the blockade, producing about 3.2 million barrels a day in March, with exports close to prewar levels. But the current blockade is different from earlier sanctions pressure because the US is physically trying to block waters around the Strait of Hormuz, stranding tens of millions of barrels at sea.
Since the blockade began, Iran has increasingly turned to floating storage. Bloomberg said aging and in some cases derelict tankers have gathered near Kharg Island, Iran’s main export terminal in the Persian Gulf.
US Treasury Secretary Scott Bessent said this week that Kharg Island was “soon nearing capacity,” warning that the pressure could cost Iran about $170 million a day in lost revenue and force Tehran toward negotiations.
“It looks like there’s been a significant slowdown in production,” Antoine Halff, co-founder and chief analyst at Kayrros, said on a conference call. “There is stress in the system.”
If storage fills completely, Iran would have little choice but to cut production by the amount it can no longer export. Based on prewar domestic consumption of about 2 million barrels a day, Bloomberg said that could leave fields operating at roughly half their potential.
Iran could try to move some oil overland to Turkey, Pakistan, Afghanistan and Uzbekistan, Hosseini said, but he put that capacity at only 250,000 to 300,000 barrels a day.
Other options, including rail shipments of some oil products to China, may be difficult and less economical. Bloomberg added that Chinese “teapot” refineries rely on discounted crude and thin margins, while the U. Treasury has also imposed new sanctions on individuals and networks tied to Iran’s “shadow banking” system, including buyers linked to those refineries.
Analysts said Iran still has tools to keep parts of the system running. Vortexa estimates Iran has access to 65 million to 75 million barrels of floating storage capacity, equivalent to roughly 37 very large crude carriers, both inside and outside the blockade.
That capacity may buy Tehran time, but how much depends on how strictly the US enforces the blockade.
Claire Jungman, director of maritime risk and intelligence at Vortexa, told Bloomberg that Iran’s use of floating storage, ship-to-ship transfers and older tankers means its system has not fully broken.
“This allows flows to continue in the near term, even under tighter enforcement,” she said. “We would frame this as a constrained but functioning system, rather than a full disruption.”
