Iran's floating oil reserves in the waters of Southeast Asia have been completely depleted by mid-October 2023. These reserves, which were estimated at around 135 million barrels at the start of the war in February, allowed Tehran to continue selling oil to China despite the U.S. naval blockade.
Shadow Fleet and Cargo Transfers
In recent years, Iran has established a network of oil tankers known as the "shadow fleet" that transported crude oil to waters near Malaysia and Singapore. In these areas, cargoes were transferred from one ship to another to make it more difficult to identify the Iranian origin of the oil. The oil then reached refineries in China, Iran's largest oil customer.
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According to energy cargo tracking data, after the first U.S. naval blockade was established in April, Iran continued to sell oil from floating reserves. With the temporary lifting of the blockade during peace negotiations in mid-June, Tehran once again increased its reserves, but after the re-establishment of the blockade in mid-July, the decline in reserves accelerated. These reserves, which had at one point reached nearly 90 million barrels, fell to less than one million barrels by October 5 and were completely depleted according to recent assessments.
Halting Oil Export Terminal Activities
Reports indicate that since late August, no oil tanker has docked to load crude oil at the main terminals on Khark Island. According to ship tracking data, Iran's crude oil exports, which were nearly one million barrels per day in July, have virtually stopped since late August. Additionally, satellite images from the Jask terminal show no signs of tankers loading oil.
Despite this, recent reports indicate that the U.S. naval blockade has not been able to completely halt all of Iran's petroleum product exports. Some shipments have been moved using ship-to-ship transfers near the coast of Oman, but the volume of these exports is very limited compared to Iran's crude oil exports.
The U.S. Central Command, CENTCOM, has stated that the naval blockade has so far deprived Iran of at least $25 billion in oil revenue. According to analysts, oil revenue constitutes about 30 to 40 percent of Iran's government revenues, and its decline will exert more pressure on Iran's economy.
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