Iran begins to run out of crude oil storage: research

ERBIL, Kurdistan Region - The US blockade on Iranian ports is choking oil exports and rapidly filling storage, pushing the country toward production cuts, according to data from Kpler, a global trade and data analytics firm.

The National Iranian Oil Company (NIOC) has around 41 million barrels of “unfilled storage capacity,” equivalent to approximately 22 days of production, according to a Kpler report published Tuesday. With limited ability to load oil for export and storage filling quickly, Kpler said NIOC has begun reducing output, noting that, as with other regional producers earlier in March, “cuts begin before storage reaches full capacity.”

NIOC holds exclusive rights to explore, drill, produce, and export crude oil and natural gas in Iran.

The disruption to Iran’s oil sector follows a US naval blockade imposed on April 13, after a nearly six-week war with the United States and Israel that began on February 28 and saw Iran restrict access to the Strait of Hormuz.

The conflict paused under a two-week ceasefire agreed earlier in April between Washington and Tehran, which has since been extended by US President Donald Trump.

US Treasury Secretary Scott Bessent said in a post on X early Tuesday that Iran’s “creaking oil industry” is beginning to shut down, attributing the slowdown to the US naval blockade. He added that “Pumping will soon collapse,” warning that gasoline shortages in Iran could follow.

According to Kpler estimates, Iran’s crude production could fall from 2.75 million barrels per day (mbd) to 1.2–1.3 mbd by mid-May if the blockade continues. Crude exports have already declined sharply since early April, dropping to about 567,000 barrels per day from pre-war levels of 1.5–1.7 mbd.


Kpler data suggests the blockade will not immediately affect Iran’s revenues, as it typically takes around two months for shipments from Kharg Island to reach northeastern China, followed by another two months before payment is made to Iranian entities such as NIOC or intermediaries.

The firm assessed that the financial impact of the blockade would likely be felt within three to four months. At that stage, Iran’s oil revenues could decline by approximately $200-250 million per day, potentially affecting imports, particularly agricultural goods. Iran is a major grain importer, with daily imports estimated at $200-250 million.

Kpler also reported no evidence of tankers successfully evading the blockade in the Strait of Hormuz, with Iranian crude loadings dropping by roughly 70 percent since the restrictions were imposed.

US Central Command said Monday that American forces have directed 38 vessels traveling to or from Iran to turn around or return to port. The development comes as Iranian state media released footage on Friday showing the Islamic Revolutionary Guard Corps boarding two cargo ships in the Strait of Hormuz.


Mustafa Nashat wrote this article from Erbil, Kurdistan Region.