Iran’s oil exports stall and Kharg Island idles under US blockade

Iran's primary oil export facility at Kharg Island has experienced a prolonged halt in tanker loadings, underscoring the severe impact of a US naval blockade. Satellite imagery from Bloomberg shows no ocean-going oil tankers at Kharg Island on multiple dates in May, marking the longest such standstill since the war began between the US and Israel. This lack of activity extends for at least ten days, indicating the growing strain on Iran's oil export capabilities.

According to data intelligence firm Kpler, loadings from Kharg Island have been sharply down since May 6, with April's average of 1.34 million barrels per day (bpd) projected to fall below 500,000 bpd in May. This represents a much steeper decline than during previous sanction periods under the Trump administration. Some rerouting to Iran’s Jask terminal has occurred, but this facility also remains behind the US blockade.

The financial repercussions of the blockade are substantial. Trade intelligence firm Kpler reported that Iranian crude oil and condensate exports plummeted from nearly 2 million bpd before the blockade to below 300,000 bpd in May. If Iran had maintained its March export levels, it would have lost an estimated $5.8 billion in revenues over April and May. May's oil revenues are approximately 84% lower than March's, with exports of 300,000 bpd generating about $837 million in May, a stark contrast to March's $5.13 billion from 1.84 million bpd and April's $3.62 billion from 1.34 million bpd.

The US blockade, implemented on April 13, has choked off Iran's most crucial source of income. About 80% of Iran's total exports typically pass through the Strait of Hormuz. Analysts note that while some Iranian oil might be discreetly transferred between vessels near Malaysia, the overall data indicates a significant reduction in oil leaving Iran. Furthermore, Iran has accumulated about 147 million barrels of crude and condensate in floating storage, with 67 million barrels stranded within the Gulf, highlighting the logistical challenges posed by the blockade.