Iran juggles oil cuts and floating storage to resist US blockade - BBG
Iran has begun curbing oil production as the US naval blockade tightens around its oil trade, with exports plunging, storage filling and tankers gathering near the country’s main export hub, Bloomberg reported.
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.
