Iran has abruptly halted all petrochemical exports, a trade worth $13 billion annually with 29 million tonnes shipped as per Iranian state figures, as tensions with the United States escalate following recent military actions. The ban, effective immediately, marks a sharp response to a US blockade of Iranian ports that began on April 13, severely disrupting the nation’s energy trade.
The US blockade has already blocked roughly 2 million barrels per day (bpd) of Iranian crude from reaching key markets like China, adding to a global supply disruption of over 12 million bpd due to the ongoing regional conflict. Iran, producing around 3.5 million bpd, now faces the risk of production cuts as onshore storage capacity nears its limit.
Analysts at FGE NextantECA estimate Iran has about 90 million barrels of available storage out of a total 122 million barrels, enough to sustain current output for two months—or three with a modest cut of 500,000 bpd in production.
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A bleaker outlook from Energy Aspects pegs usable storage at just 30 million barrels, suggesting capacity could be exhausted in as little as 16 days based on recent export levels of 1.8 million bpd. Richard Bronze, co-founder of Energy Aspects, noted that if the blockade extends into May, output reductions would become unavoidable. Iran may delay cuts by using oil tankers as floating storage, though the US military has already intercepted eight Iran-linked vessels and turned back others, including the sanctioned Chinese-owned tanker Rich Starry in the Strait of Hormuz.
Compounding the crisis, Iran’s domestic refineries process only about 2 million bpd, leaving a significant surplus with nowhere to go while exports remain blocked. A top Iranian general issued a stark warning, stating, “If the aggressive and terrorist US continues its blockade in the region of Iran’s ports, then this would be viewed as a violation of the ceasefire by Iran.” The general added that Iran would halt all exports and imports across the Gulf, the Sea of Oman, and the Red Sea if provocations persist.
The blockade’s impact is already visible, with US destroyers stopping tankers attempting to depart from Chabahar port on the Gulf of Oman. As storage constraints tighten, Iran’s historical peak stock level of 92 million barrels, recorded in May 2020, looms as a likely ceiling. With global oil prices poised to rise further amid the supply crunch, the next few weeks could force Iran into a production cut as early as mid-May.
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