Societe Generale analysts report that Iran's ability to maintain full oil production under the ongoing U.S. blockade is constrained by limited onshore storage and floating stocks, with export disruptions expected to intensify as storage fills up [1]. Since the U.S. blockade began on April 13, Iranian oil and product stocks have increased by 12%, forcing the country to divert crude into onshore tanks as oil loadings slow [1]. Industry sources estimate that Iran could sustain production at approximately 3.5 million barrels per day (mb/d) for about 48 days, given domestic consumption of roughly 1.6 mb/d [1]. However, Energy Aspects provides a more conservative estimate, suggesting Iran has only about 30 million barrels of available onshore storage, which would allow for just two weeks of full production [1].
Societe Generale suggests that output curtailments would likely begin after around 16 days of a complete export shutdown, with cuts ramping up by day 30 to reach shut-ins equivalent to 1.7–2.0 mb/d on average [1]. Despite these constraints, Iran retains some revenue flexibility due to significant volumes of oil already afloat; Kpler estimates that approximately 176 million barrels of Iranian oil are currently at sea, with about 142 million barrels located outside the Arabian and Omani Gulf basin, beyond the immediate reach of a U.S. naval operation focused on the Strait of Hormuz [1].
The analysis highlights the time-limited nature of Iran's ability to withstand export disruptions, with storage capacity acting as a critical bottleneck. The presence of large floating stocks provides temporary relief, but the need for output cuts is expected to escalate as storage options are exhausted [1].
CONCLUSION
Iran's oil production faces imminent curtailments due to storage limitations under the U.S. blockade, with significant output cuts likely within weeks if exports remain blocked. While floating stocks offer short-term revenue opportunities, the overall market impact is high as Iran's ability to sustain full production is time-limited.