During the war, Iran stored millions of barrels of crude oil at sea and transported them to China for profit to support the Iranian regime. However, with the ongoing blockade by the US military on Iranian ports, Iran’s floating oil reserves used for sales to China have been completely depleted.
According to a report by The Wall Street Journal, data analysis company Kpler estimated that Iran’s floating reserves peaked at nearly 90 million barrels of crude oil. By October 5th, the reserves had dropped to less than 1 million barrels, and have since been completely exhausted. The main reason for this depletion was the blockade by the US Navy, which disrupted Iran’s supply of crude oil to Chinese refineries.
Storing oil at sea has been a carefully constructed part of Iran’s system for years. Instead of directly shipping oil to Chinese refineries, oil tankers associated with Iran first transported crude oil to waters near Malaysia and Singapore. The oil was then transferred to other tankers, which then carried it to Chinese refineries to circumvent US sanctions.
Homayoun Falakshahi, the head of crude oil analysis at Kpler, stated, “Iran has no more oil to ship to China.”
Iran’s economy was already in trouble, and the sharp decrease in oil revenue has further worsened the situation, leading to severe inflation and shortages of goods. The Iranian currency has been steadily depreciating, with a one-third drop in the exchange rate against the US dollar since early July, further exacerbating inflation.
Falakshahi explained that oil sales typically account for 30% to 40% of the Iranian government’s revenue. He said, “The US’s strategy seems to be either to force the Iranian regime back to the negotiating table by exerting economic pressure to accept the nuclear agreement or to incite domestic protests, making it difficult for the regime to respond.”
Last Saturday, the US Central Command responsible for Middle East affairs (CENTCOM) stated that the US military blockade has caused Iranian authorities to lose at least $25 billion in oil revenue, further weakening Iran’s ability to repair damaged factories and replenish weapons.
General Brad Cooper, commander of CENTCOM, stated that the US military action is imposing a “heavy price on Iran’s security apparatus.”
Analysts pointed out that other export routes for Iranian oil, such as land transport via trucks, cannot compensate for the scale of maritime oil shipments.
According to the Huari Daily, energy tracking firm Vortexa’s analyst Emma Li also noted a significant decrease in Iranian crude oil inventories. As of October 9th, she estimated that there were only about 6 million barrels of Iranian oil left along the coast of Singapore.
She mentioned that Chinese refining companies are increasingly turning to other sources, including Brazil and West Africa, for their supply.