Iran's Floating Oil Reserves Run Dry After US Blockade

what happened

According to analysts at Kpler, Iran's floating storage of crude on tankers in Asian waters was fully depleted by mid-October. Tehran had long sold this oil to China, bringing in billions of dollars, but a US naval blockade stopped it from replacing the barrels it sold. US Central Command said the blockade has cost Tehran at least $25 billion in oil revenue.

The workaround involved tankers unloading crude off Malaysia and Singapore, where other ships carried it on to Chinese refineries. That chain is now broken. Analysts say Chinese payments can take about two months to arrive, so Tehran may still receive some funds from earlier sales. Meanwhile, oil from other Middle East producers is moving through the Strait of Hormuz, with volumes recently exceeding prewar levels.

why it matters

For markets, this means less Iranian supply reaching China, though the wider region is not short of crude, since Gulf exports through Hormuz are rising. Chinese refiners are turning to Brazil and West Africa. The net effect on Brent will depend on how long the blockade lasts and how Iran responds.

market impact

Oil: less Iranian crude reaching China, offset by more alternative supply — mixed pressure on Brent

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