Iran could run out of oil storage capacity in three weeks
According to analysts at Kpler, Iran has spare storage capacity for oil for only 12–22 days. As a result, the country may be forced to cut production by a further 1.5 million barrels per day by mid-May, reports Bloomberg.
Previously, according to Goldman Sachs Group Inc., Iran had already cut production by approximately 2.5 million barrels per day. Production has also fallen in other countries in the region, notably Saudi Arabia, Iraq, Kuwait and the United Arab Emirates, following the outbreak of the conflict on 28 February.
At the same time, analysts note that the financial consequences for Iran may not be felt immediately. According to Kpler’s estimates, the impact on revenues will only become noticeable in three to four months’ time.
Iranian oil exports have fallen sharply since early April following the US imposition of a naval blockade on Iranian ports. Against the backdrop of reduced traffic through the Strait of Hormuz, supply volumes have fallen to approximately 567,000 barrels per day. In March, this figure stood at around 1.85 million barrels per day.
Analysts also note that it takes around two months for Iranian oil to reach its main buyers, particularly China. After that, a further two months or so are required for payment for the supplies.
Kpler reported that it had not recorded any instances of tankers managing to circumvent the US naval blockade in the Strait of Hormuz. The volume of Iranian oil loaded onto tankers has fallen by approximately 70 per cent since the blockade was imposed.
