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Iran can withstand a complete halt in oil exports for up to two months before it is forced to cut production, analysts told Reuters, after the United States began blocking shipping in and out of Iranian ports on April 13.
The blockade could stop around 2 million barrels per day (bpd) of Iranian crude from reaching China, its main buyer, the report said.
Any production cuts in Iran would add to more than 12 million bpd of supply already disrupted by the regional war, further tightening oil markets and pushing prices higher.
With exports blocked, Iran would need to divert crude into onshore storage tanks. Once those tanks are full, the OPEC member would have to reduce upstream output.
Consultancy FGE NextantECA said Iran has about 90 million barrels of available onshore crude storage capacity, out of total capacity of around 122 million barrels.
“Iran can sustain current production of around 3.5 million bpd for roughly two months without exports, extendable to around three months with a modest 500,000 bpd production cut,” FGE NextantECA said in a note.
The consultancy also said Iranian domestic refineries process about 2 million bpd of oil.
Energy Aspects gave a much lower estimate for available onshore storage, putting it at around 30 million barrels based on data from Kayrros.
Under that estimate, Iran could maintain current export levels for only about 16 days before storage capacity is exhausted, based on exports of 1.8 million barrels per day.
“The blockade may not have a significant impact on Iranian production in April, but if it continues into May then output would need to be reduced substantially,” said Richard Bronze, co-founder of Energy Aspects.
Bronze said the consultancy does not believe Iran can use its full nameplate storage capacity.
He added that historical data showed Iranian stocks peaked at 92 million barrels in May 2020, which he said likely represents a more realistic ceiling.
Bronze also said Iran is likely to use available oil tankers in its ports as floating storage, which could delay the need for production cuts.
That would give Tehran some additional room even if onshore storage begins to fill under the blockade.
Still, the overall outlook in the report suggested that a prolonged blockage of exports would eventually force Iran to curb output.
The U.S. military said more vessels were being turned back under the blockade, including the Chinese-owned tanker Rich Starry, which is under U.S. sanctions and was seen heading back through the Strait of Hormuz on Wednesday.
The Wall Street Journal reported that eight Iran-linked oil tankers had been intercepted since the blockade began on Monday.
A U.S. official also said a U.S. destroyer stopped two tankers trying to leave Iran’s Chabahar port on the Gulf of Oman on Tuesday.
The report said any Iranian production shutdowns would add to supply losses already caused by the broader regional war.
That would tighten markets further and likely lift oil prices even more.
Iranian authorities were not immediately available for comment, according to the report.
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