Iran to run out of place to store oil it produces

Tehran: Iran is fast running out of space to store its crude as its oil exports remain choked by the US naval blockade of its ports near the Strait of Hormuz. The US blockade has prevented 2 million barrels/day of Iranian oil from entering the world markets, tightening global supply.

With its shipments collapsing amid continued output from the wells, the Islamic Republic has just enough unused storage capacity to last another 12 to 22 days, according to Kpler analysts’ latest report. 

The looming storage crunch is threatening to accelerate production cuts in what was once the second-largest source of crude under the Organisation of Petroleum Exporting Countries (OPEC). Per Kpler's estimations, Iran may be forced to cut daily oil output by another 1.5 million barrels by mid-May. The Islamic Republic has already curtailed 2.5 million barrels of daily crude production after the start of the war, Goldman Sachs Group Inc said last week. 

Other Gulf nations, including Saudi Arabia, Iraq, Kuwait and the UAE, have also reduced output since the conflict erupted on February 28.