Iran Could Soon Be Drowning in Oil

Iran is running out of places to park its oil. With a US naval blockade choking off exports and talks to end the conflict stalled, Tehran is stuffing crude into decaying storage tanks, improvised containers, and even rail cars headed to China in a bid to keep wells flowing and avoid a costly shutdown, the Wall Street Journal reports. Analytics firm Kpler says Iran's seaborne crude loadings have plunged from about 2 million barrels a day before the war to roughly 567,000 barrels a day since the blockade began April 13, forcing production cuts and raising fears the country could hit storage limits within 12 to 22 days, per Bloomberg.

If the blockade continues, Iranian crude production could fall 50% from current levels, to around 1.2 million barrels a day by mid-May, according to Kpler. Though impacts to revenue would be delayed by months, energy analysts warn that sudden, deep cuts could mean lasting damage to Iran's aging, low-pressure fields. The squeeze is rippling beyond the country: the closure of the Strait of Hormuz to most traffic has pushed Brent crude back above $108 a barrel, driving up fuel costs worldwide. Iran has floated a proposal to halt its attacks in the strait in exchange for ending the war and lifting the blockade, while tabling nuclear talks for now, but the US appears unwilling to bite.