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. (Read More)
