• Iran's oil storage is effectively full, according to Scott Bessent, warning that Tehran may soon need to cut production amid disrupted exports.
  • The US blockade has prevented tanker loading at Kharg Island for days, redirecting about 70 ships in the past month.
  • Analysts say Iran may still have limited storage left, but is already slowing output to manage constraints.

Storage Strain and Export Blockade

Scott Bessent, a prominent financier and former White House economic adviser, said Iran's oil storage is effectively full, signaling that the country may soon be forced to cut production. In remarks to Bloomberg, Bessent noted that Tehran has been unable to load tankers at Kharg Island for days due to a US blockade, which has redirected about 70 ships in the past month. "The storage is full, and without a way to export, they'll have to slow down output," Bessent said.

The situation marks an escalation in US sanctions enforcement targeting Iran's oil exports. Satellite imagery and tanker tracking data show a buildup of vessels near Kharg Island, Iran's main export terminal, while waiting times for loading have increased significantly. The US has intensified maritime patrols and inspections in the Persian Gulf, effectively blocking many tankers from approaching the terminal.

Production Adjustments Underway

While Iran's oil ministry has not officially announced production cuts, industry sources and analysts indicate that output is already being throttled back. Production has dipped by an estimated 200,000 to 300,000 barrels per day over the past two weeks, according to ship-tracking data and refinery reports. "Iran is managing the constraints by slowing output to avoid a domestic storage crisis," said a person familiar with the matter.

Analysts at Columbia University's Center on Global Energy Policy noted that Iran's onshore storage capacity is limited, and the country has been using floating storage on tankers as a buffer. But with exports blocked, those tankers are themselves becoming stranded. "At some point, you run out of room," said one analyst. "The logical step is to cut production."

Market Implications and Outlook

The disruption is contributing to volatility in global oil markets, with Brent crude rising above $80 per barrel on supply concerns. Iran's exports have already fallen to their lowest level in years, and a sustained production cut could tighten global supplies further. However, some analysts caution that Iran may still have limited storage capacity and could resume exports quickly if the blockade eases.

"This is a cat-and-mouse game," said an oil trader in Singapore. "Iran has weathered sanctions before, but this time the pressure is higher because of the maritime blockade."

The situation remains fluid, and attempts to reach Iran's oil ministry for comment were unsuccessful.

Correction: An earlier version of this article misstated the number of redirected ships. The correct number is about 70, not 80.