Irans Oil Storage Levels Near Capacity, Production Cuts Speculated

US Naval Blockade of Hormuz Raises Concerns Over Iranian Oil Production

The United States naval blockade of Iranian ports and the Strait of Hormuz, which has been in place since April 13, is expected to have a significant impact on Iran’s oil production. According to data analysis by Kpler, a leading data and analytics company, Iran may run out of crude storage capacity within 12 to 22 days if the blockade persists.

The US Treasury Secretary, Scott Bessent, has stated that storage capacity at Kharg Island, where most of Iran’s oil is exported, will be full “in a matter of days”. This has raised concerns about the potential for Iran to curb its oil production. The Strait of Hormuz is a narrow channel that connects the Gulf to the open ocean and spans the territorial waters of Iran on its northern side and Oman on its southern side.

Iran’s oil exports have increased since Tehran closed the Strait of Hormuz to other shipping, but the US naval blockade has now forced most of these exports to be stored instead. Satellite data show a sharp increase in oil storage capacity at Iranian ports since the blockade began. The energy consultancy Facts Global Energy reports that Iran’s domestic refineries have a production capacity of 2.6 million barrels per day.

The US naval blockade is intended to curb Iran’s oil revenues, which have risen significantly since Tehran closed the Strait of Hormuz. The blockade has also led to increased tensions between the US and Iran, with both sides accusing each other of piracy and violating international law.

Source: Al Jazeera