Iran is cutting oil production as it struggles with mounting storage pressure caused by the US blockade of the Strait of Hormuz, Bloomberg reported yesterday, citing a senior Iranian official.
“As the US naval blockade in the Strait of Hormuz tightens around Iran’s oil trade, exports have plunged in recent weeks and storage is rapidly filling,” according to the news outlet.
Officials familiar with Iran’s energy policy say the country now has a narrowing window of roughly a month, at current production levels, before it runs out of storage capacity.
A senior official reportedly added that Tehran is “proactively reducing” crude output as a pre-emptive measure rather than waiting for tanks to fill completely, according to Bloomberg.
The war, launched by the United States and Israel in late February, has been on hold since April 8, with one failed round of peace talks having taken place in Pakistan since then.
Iran has maintained a stranglehold on the strait since the war began, choking off major flows of oil, gas and fertiliser to the world economy, while the United States has imposed a counter-blockade on Iranian ports.
The US military says its blockade of Iranian ports has stopped $6 billion in Iranian oil exports, while inflation in Iran, already high before the war, has surged past 50 per cent.
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