Oil: Iranian output faces storage time limit – Societe Generale

Societe Generale analysts argue that Iran’s ability to sustain full oil production under the U.S. blockade is time‑limited by onshore storage and floating stocks. They estimate output cuts would likely begin after about 16 days of a complete export shutdown and ramp up by around day 30, although significant volumes already afloat still provide some revenue flexibility.

Iran storage constraints cap export disruption

"Iran will start to face rising pressure with oil loadings slowing and oil and product stocks building by 12% since the US blockade began on April 13. Estimates vary as to how long Iran could maintain full production as it has been forced to divert crude into onshore tanks."

"According to industry sources, Iran could sustain production of around 3.5mb/d for roughly 48 days (as of the time of writing) as its domestic consumption is roughly 1.6mb/d. Energy Aspects is less optimistic on that figure, estimating that the nation has lower available onshore storage of about 30 million more barrels, giving them about two weeks ability to maintain full production."

"Curtailments would likely begin earlier and build progressively. A reasonable rule of thumb is that Iran would need to start trimming output after roughly 16 days of a complete export shutdown, with cuts ramping up towards full export‑equivalent shut‑ins—around 1.7 – 2.0 mb/d (on average) —by approximately day 30."

"Iran, however, still retains an ability to generate revenue from crude volumes already positioned beyond the Gulf. According to Kpler, roughly 176 million barrels of Iranian oil are currently afloat, with about 142 million barrels located outside the Arabian and Omani Gulf basin—placing them beyond the immediate scope of a US naval operation centred solely on the Strait of Hormuz."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)