DUBAI, United Arab Emirates — Iran is already dialing back oil production as a U.S. blockade halts exports and fills storage tanks toward capacity, oil analysts warn, marking a deepening economic pressure on Tehran even as its own closure of the Strait of Hormuz disrupts global energy supplies.
With tankers unable to depart since the blockade began on April 13, Iran’s oil is piling up. The country had been pumping more than 3 million barrels a day, roughly half for its domestic market. But export routes are now severed, and the resulting glut has left little room for more crude.
Antoine Halff, co-founder and chief analyst at environmental intelligence firm Kayrros, said there are signs that storage is not filling as fast as usual at Kharg Island, Iran’s main export terminal, indicating that production has already been cut. “It looks like there’s been a significant slowdown in production,” Halff said.
Kpler estimates Iran has about two weeks of remaining storage capacity even after reducing output. Wood Mackenzie puts the figure at roughly three weeks.
“If the blockade persists, cuts become inevitable,” wrote Alexandre Araman of Wood Mackenzie. He added that a shutdown lasting more than a month “risk long-term damage” to Iran’s oil reservoirs, and recovery of older fields “remains uncertain.”
Miad Maleki, a former U.S. Treasury sanctions expert now at the Foundation for Defense of Democracies, noted that Iran’s oil infrastructure has suffered decades of poor maintenance under sanctions. “They’ve been under sanctions, they’ve been isolated for 47 years now. Those oil wells are not maintained well. Their machinery is not maintained well,” Maleki said. Once wells are shut down, he added, they won’t easily “snap back after a few months.”
He cautioned that job losses among oil workers could spark new unrest, recalling the 1979 revolution when oil strikes helped destabilize the former shah.
The U.S. Treasury Department has ramped up sanctions on Iranian oil shipments already at sea, and the Navy has seized at least two tankers off Asia believed to be carrying Iranian crude. The squeeze is depriving Iran of hard currency at a time when its economy is battered by weeks of war and months of domestic turmoil.
President Donald Trump on Tuesday claimed Iran was “in a ‘State of Collapse.’” Treasury Secretary Scott Bessent posted on X that “Iran’s creaking oil industry is starting to shut in production thanks to the U.S. BLOCKADE,” and predicted gasoline shortages. However, there have been no immediate signs of gasoline shortages in Iran.
Iranian state television, run by hard-liners, has aired discussions of a possible oil storage crisis, and Oil Minister Mohsen Paknejad on Monday praised oil terminal staff for their “continuous perseverance,” in what analysts saw as an indirect acknowledgment of the pressure.
Despite the squeeze on its own exports, Iran’s closure of the Strait of Hormuz — the world’s most important oil choke point — continues to magnify the global impact. Jet fuel shortages and rising gasoline prices are being reported around the world, and the combination of blocked Iranian exports and the Hormuz shutdown has intensified the turmoil in energy markets.