US Naval Blockade Dries Up Iran's Secret Oil Supply to China
Analysts report Iran's offshore oil reserves, crucial for funding its war effort, have been depleted due to U.S. naval action.
Iran's clandestine oil shipments to China, facilitated by its shadow fleet, have been effectively halted by a U.S. naval blockade of its ports, according to analysts. This disruption has depleted the country's offshore oil stockpile, which had been instrumental in offsetting the economic impact of U.S. sanctions and a spiraling domestic economy.
The blockade has prevented Tehran from replenishing its reserves, causing them to shrink dramatically. By October 5, the stockpile reportedly fell below one million barrels, and is now considered virtually nonexistent, based on data from maritime analyst firm Kpler.
Homayoun Falakshahi, head of crude-oil analysis at Kpler, stated that "There’s no more oil to discharge to China anymore." The ability to sell oil from offshore stockpiles had enabled Tehran to generate billions in revenue during the conflict, helping to mitigate record-high inflation and the depreciation of its national currency.
U.S. Central Command, responsible for the naval blockade, estimates that Iran has lost at least $25 billion in oil revenue as a direct result of the naval mission. Admiral Brad Cooper, head of CENTCOM, reported that "With the exception of humanitarian assistance we’ve allowed in, Iran has no exports and no imports by sea." He further asserted that these actions have imposed "devastating costs on Iran’s security apparatus and the IRGC (Islamist Revolutionary Guard Corps) specifically."
Oil sales typically account for 30% to 40% of Iran's national revenue and represent its primary source of foreign exchange. These exports also fund approximately 60% of the government's expenditures, including payments to its military forces.
Experts have previously warned that a significant decline in oil sales could destabilize the Iranian regime, forcing its elite class to experience the economic hardships that have long affected ordinary citizens. The reduction in oil exports comes as overall oil traffic through the Strait of Hormuz and the Gulf of Oman has approached pre-war levels, with about 14 million barrels transiting daily, according to Kpler. Total oil exports from the Persian Gulf have reportedly surpassed pre-war averages.
Despite these pressures, Iranian officials have maintained their claims to control over the Strait of Hormuz and have expressed confidence in their ability to withstand further pressure from the United States.