AI summary
Summary of article:
The US naval blockade cut off supplies to Iran’s floating oil depots, causing crude originally destined for China to dry up in mid-October. Iran’s oil revenues and economy are under pressure, but the regime has not yet made any significant relaxations.
The US naval blockade that has been going on for several months is gradually endingiran The most important source of cash. The Wall Street Journal quoted energy analysis agency Kpler as saying that millions of barrels of Iranian crude originally stored on tankers in Asian waters had been depleted by mid-October. These “floating oil storages” were able to supply Chinese refineries continuously, but due to the US blockade they are no longer able to replenish new crude oil.
“There is no oil left for China to unload,” said Homayun Falakshahi, head of crude oil analysis at Kpler.
This maritime reserve has been a vital buffer for Tehran during most of the war. Iran has sent crude oil to Malaysia to avoid US sanctions for many yearsSingapore Offshore, then transferred to other tankers and shipped to Chinese refineries, which not only increases the difficulty of detection, but also turns local waters into floating “floating oil depots”.
But the US naval blockade has prevented Iran from replenishing it with new crude exports, and these reserves are now at their lowest level. US Central Command says Iran has suffered losses of at least $25 billion so far due to the blockadeOil The revenue has also limited Tehran’s ability to rebuild destroyed factories and replenish weapons.
Iran’s oil revenue accounts for about 30% to 40% of government revenue and is also its largest source of foreign exchange. With exports blocked, Iran’s economy is already facing severe inflation and material shortages, and the rial has lost nearly a third of its value against the US dollar since the beginning of July.
Iran is still trying to find alternative solutions, including storing crude in old storage tanks or shipping it by truck to neighboring countries, but analysts believe these alternative routes are not enough to make up the gap in seaborne exports. China’s previous oil purchases usually take about two months to be credited, so Tehran may receive some funds from old orders in the coming weeks, but this cash flow will also gradually weaken.
It is worth noting that Iran has survived the blockade for more than half a year and has not collapsed as quickly as some Americans expected, nor has it made major concessions in nuclear negotiations.
Farkashahi said, “The U.S. calculation appears to be that economic pressure will either force the Iranian regime to return to the negotiating table and accept the nuclear deal, or it will trigger domestic protests that will make it difficult for the regime to control it.”
Eman Nasseri, senior vice president for the Middle East and Asia at energy analytics company FGE NexentECA, who previously served as the research arm of the Iranian oil ministry, also believes the blockade is indeed working, but the Iranian regime has repeatedly shown flexibility in the past.
“Is it effective? It is, it’s really effective.” “Let’s wait another year and see if this system can be sustained,” he said.
Summary FAQ
-
Due to the ongoing blockade by the US Navy, Iran is unable to offset new crude oil exports; Inventories previously stored on oil tankers offshore Malaysia and Singapore were gradually depleted and were completely depleted by mid-October.
-
Iran first transports the crude to tankers in Asian waters for temporary storage, and then transfers it to other ships for delivery to Chinese refineries, thereby avoiding US sanctions and making tracing more difficult while building temporary offshore oil depots.
-
The blockade has cost Iran at least $25 billion in oil revenues and led to inflation, material shortages, and depreciation of the rial; But Iran has not yet collapsed and it still has to make major concessions in nuclear talks.
