• Iran's oil exports fell sharply in January 2026 to below 1.39 million barrels per day, a 26% year-over-year drop, as US-Iran tensions escalate.
  • WTI crude surged past $66 per barrel by late February, driven by geopolitical risks and a US inventory draw, despite a global supply surplus.
  • Capital outflows from Iran hit a record $15 billion, offsetting trade gains and signaling economic strain amid sanctions and uncertainty.

A Contradiction in Tanker Data

Recent reports of a tripling in Iran's oil shipments to nearly 20 million barrels loaded between February 15-20 are at odds with tanker data showing a downward trend since October 2025. Instead, unsold crude has accumulated at sea, with over 170 million barrels stored on tankers—nearly triple the year-over-year level. This discrepancy highlights the volatility in Iran's export patterns as the United States boosts its military presence in the region, echoing pre-conflict patterns that have historically spiked oil prices.

Efforts to restructure Iran's oil-dependent economy have hit a snag, with export value falling 10% to $30.7 billion in the first half of its fiscal year starting March 2025. According to people familiar with the matter, actual revenues are lower due to $11-12 per barrel discounts to China, Iran's main buyer, and sanctions costs; only about $13 billion of $20 billion earned reached the government. A senior official, speaking on condition of anonymity, noted that capital outflows are exacerbating fiscal pressures, with uncertainty mounting over future deals.

Geopolitical Tensions Drive Market Volatility

Brent crude rallied $11 per barrel year-to-date amid fears of disruptions to Iran's 3.3 million bpd production or potential closure of the Strait of Hormuz, which handles 20% of global oil supply. President Trump's imposition of 25% tariffs on goods from Iran-trading countries, effective January 2026, threatens China's imports and adds to the economic squeeze. Nuclear talks drag on amid Iranian protests since December 28, 2025, and failed Russia-Ukraine ceasefire talks maintain parallel sanctions, keeping markets on edge.

Without a deal to ease tensions, Iran could face further export declines, forcing it to expand barter deals for oil to $1.5 billion for basic goods imports, according to industry sources. This move signals constrained revenues and a shift toward survival tactics in a strained economy. Attempts to reach Iranian officials for comment were unsuccessful, but stakeholders, including Chinese refiners facing tariff risks, are closely monitoring developments.

Supply Glut Versus Disruption Risks

Global oil production rose to 106.6 million bpd by January 2026, supporting a supply surplus of 3.7 million bpd, but this glut remains vulnerable to Iranian disruptions. OPEC+ has held Q1 production steady, supporting prices amid the US inventory surprise of a 9 million barrel draw. Experts see a low-probability escalation but note a modest $4 war premium currently priced into markets, with short-term scenarios ranging from Brent hitting $71 per barrel in Q2 2026 to $91 in Q4 if Iran's exports are fully disrupted.

In a worst-case scenario, a one-day blockade of the Strait of Hormuz could surge prices to $120-150 per barrel, though ample Gulf spare capacity offers some offset. The long-term baseline assumes $55-60 per barrel in 2026 if no major disruption occurs, but with Iranian petroleum product exports dropping to 350,000 bpd in January, the economic outlook remains precarious. Gold reserves are rising as central banks hedge against instability, with China adding for 15 consecutive months.

Correction: An earlier version overstated the surge in Iran's oil exports; data indicates a decline rather than an increase, with exports falling to 1.13 million bpd in January 2026 from an average of 1.4 million bpd in 2025.