JPMorgan Chase stated in a research report that a successful maritime physical blockade by the US Navy would force Iran to cut its oil production. Analysts, including Natasha Kaneva, wrote in a report dated April 21 that such blockade measures would not only impose financial restrictions but would also directly constrain the total volume of crude oil exports, significantly reducing Iran's ability to conduct trade through indirect channels and forcing long-term production cuts.
Iran's onshore crude oil storage capacity is approximately 86 million barrels, with a current utilization rate of 54%. The remaining available capacity is about 40 million barrels, which could only support roughly 22 days of oil exports. Additionally, around four very large crude carriers (VLCCs) linked to Iranian operations are currently anchored in the Strait of Hormuz, with a combined loading capacity of approximately 8 million barrels of crude oil. This could extend the export buffer period to about 26 days.
If export routes were completely severed, Iran would be forced to initiate production cuts after approximately 16 days. By around day 30, the scale of reductions would intensify, potentially leading to a near-total halt in crude exports, with estimated daily cuts reaching about 1.9 million barrels.
Crude oil shipments that manage to bypass the blockade, inventories stored outside the Persian Gulf, and additional revenue acquired during the initial phase of the conflict would provide Iran with short-term financial cushioning.
The US Navy would face significant operational challenges in attempting to intercept Iranian-affiliated tankers in areas such as Asian waters. Iran currently has a total of 176 million barrels of crude oil in transit at sea. Of this, 142 million barrels have already departed the Arabian Gulf and Gulf of Oman regions, placing them outside the scope of a US naval blockade focused on the Strait of Hormuz.
The Iranian government is highly likely to explore various alternative shipping methods, including utilizing third-country logistics to transfer crude and employing tankers flying the flag of China to transport Iranian oil. The analysts added that while the blockade might strengthen the US negotiating position, this would require strict and sustained enforcement, likely necessary for several months.
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