Iran Cuts Oil Production Under Pressure From U.S. Blockade
- 3.05.2026, 11:18
Bloomberg revealed the details.
Iran is cutting oil production and building up floating reserves amid a tightening U.S. naval blockade in the Strait of Hormuz. Pressure on the country's key source of revenue is intensifying, but Tehran is trying to buy time, drawing on years of experience in resisting sanctions, writes Bloomberg.
The publication's sources close to Iranian authorities say oil exports have fallen sharply in recent weeks and storage facilities are filling up fast. In response, the authorities have begun to preemptively reduce production to avoid a situation in which capacity would be completely exhausted and wells would have to be shut down on an emergency basis.
The key feature of the current strategy is a controlled reduction in production. Iranian engineers, experienced in sanctions and forced shutdowns, have learned to temporarily "mothball" wells without significant damage to the fields and quickly bring them back into production.
In contrast to previous years, when Iran was able to circumvent sanctions through the so-called shadow fleet and hidden supplies, the current situation is complicated by the physical presence of the United States in the region. The blockage of shipping in the Strait of Hormuz actually limits the possibility of exporting oil by sea, resulting in the accumulation of tens of millions of barrels of crude.
To compensate for the decline in exports, Tehran is actively using floating storage facilities. An increasing number of tankers, including old and decommissioned vessels used for temporary oil storage, are concentrated around Kharg Island, the country's main export terminal. Analysts estimate that the total volume of such storage may reach 65-75 million barrels.
The possibilities of this scheme are, however, limited. According to experts, at the current level of production Iran may face the full filling of storage facilities within the next month. In this case, the country will have to further reduce production to a level corresponding to domestic consumption and limited alternative export channels.
Such alternatives include deliveries by land - to Turkey, Pakistan and Central Asian countries. However, their volumes are significantly lower than sea transportation and are not able to fully compensate for losses. More complex logistical schemes, including railroad deliveries to China, are also being discussed, but they are less economically profitable.
In the background, oil prices have risen to a four-year high, which partly plays into Iran's hands by increasing pressure on the US and the global economy. Tehran expects to be able to withstand economic losses longer than their opponents - the effects of rising energy prices.
Despite serious economic difficulties, including a falling national currency and rising domestic prices, Iranian authorities say they are ready to withstand the pressure. The so-called resistance economy strategy involves adapting to sanctions and minimizing their effects, rather than a quick return to growth.
Experts note that Iran's oil export system remains "limited but functioning." Through flexibility - the use of floating storage facilities, transshipment of oil between ships and a variety of logistical solutions - the country manages to maintain minimal supply flows even in the face of increased scrutiny.
In the long term, however, much will depend on the strict enforcement of the blockade and Iran's ability to find new workarounds. For now, the confrontation is entering a phase of protracted economic pressure, where time is the key factor.