Iran Faces Crude Storage Crunch Amid Tightening US Blockade

Iran is facing a mounting crude storage crisis that could soon force deeper production cuts, according to a report by Kpler. The country’s remaining storage capacity is estimated to last only 12 to 22 days, raising the likelihood of an additional reduction of up to 1.5 million barrels per day by mid-May.

This development follows earlier estimates by Goldman Sachs, which suggested that Iran has already curtailed production by nearly 2.5 million barrels per day. The disruption is part of a wider regional impact, with major producers such as Saudi Arabia, Iraq, Kuwait, and the United Arab Emirates also scaling back output following escalating hostilities since late February.

Despite the intensifying storage constraints, the immediate financial impact on Tehran may be delayed. Since early April, Iranian crude exports have declined sharply after U.S. President Donald Trump ordered a naval blockade targeting Iranian oil shipments. As a result, traffic through the strategically vital Strait of Hormuz has thinned significantly, with exports dropping to approximately 567,000 barrels per day—down from an average of 1.85 million barrels per day in March.

According to Kpler, Iran’s revenue streams may remain relatively stable in the short term due to the lag in shipment and payment cycles. Crude deliveries, particularly to destinations such as China, often take up to two months and are frequently routed through indirect channels designed to circumvent sanctions. Payment settlements can take an additional two months, effectively postponing the financial strain.

However, enforcement of the blockade appears to be tightening. Kpler reports that no tanker has successfully bypassed U.S. naval restrictions in the Hormuz region, while crude loadings have fallen by nearly 70% since the measures were implemented.

The unfolding situation reflects a broader geopolitical escalation involving the United States, Israel, and Iran, placing one of the world’s most critical energy corridors under sustained pressure. Given that the Strait of Hormuz facilitates a significant share of global oil trade, any prolonged disruption is likely to have far-reaching implications for international energy markets.