Summary
- Iran's crude storage facilities are already more than half full, meaning oil output cuts could become unavoidable in about 16 days if exports are blocked.
- Experts said Iran would likely maintain production for 10 to 15 days after an export cutoff before moving to field-by-field production cuts.
- If the blockade is prolonged, concerns are rising over disruptions to Iran's oil exports and possible retaliation in the Red Sea and elsewhere, which could increase global energy market volatility.
Forecast Trend Report by Period
Satellite data cited by the Financial Times on June 15 showed Iran's crude storage facilities were already about 51% full. If exports of roughly 1.8 million barrels a day are blocked, storage capacity would be reached in about 16 days.
That means Iran may have to rein in production before its storage sites are completely filled. Energy consultancy Energy Aspects projects that if exports are cut off, Iran could maintain output for about 10 to 15 days before starting field-by-field production cuts.
A full supply disruption may not hit immediately, however. Iran has already created room to keep exports flowing by loading crude onto very large crude carriers for offshore storage, and it is also known to hold sizable inventories outside the strait.
Of Iran's current production of about 3.6 million barrels a day, roughly half is used for domestic consumption. At the same time, recent sanctions relief has boosted oil sales, sharply increasing revenue from prewar levels.
Some in the market estimate the blockade could cost Iran more than $400 million a day. Even so, Iran is seen as having enough capacity to withstand geopolitical tensions for some time.
Experts describe the situation as more than a simple supply disruption. If the blockade is prolonged, Iran could retaliate along other maritime routes, including the Red Sea, adding to volatility in global energy markets.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.
