US Naval Blockade Costs Iran Nearly $6bn in Oil Revenues

The Impact of the US Naval Blockade on Iran's Oil Exports

Iran's crude oil exports fell to their lowest level in at least six years in May, as a United States naval blockade squeezes Tehran's most important source of income amid a fragile ceasefire between the two nations.

The Blockade's Effect on Iranian Oil Revenues

According to data from trade intelligence firm Kpler, Iranian crude oil and condensate exports fell from close to 2 million barrels per day (bpd) to below 300,000bpd in May. Using a conservative price estimate of $90 a barrel, exports of 300,000bpd would generate about $27m in revenue each day, or roughly $837m over the course of May.

The Financial Impact on Iran

The figures suggest Iran's oil revenues in May were approximately 84 percent lower than they were in March. If Iran expected monthly revenues on the scale of its March returns, it has lost $5.8bn over April and May.

Iran's Oil Production and Storage

For now, yes, Iran is still producing oil. However, Tehran is increasingly being forced to store the crude that it cannot sell. About 147 million barrels of Iranian crude and condensate are currently being held in floating storage.

The Future Outlook

Analysts say the blockade is ultimately a contest over which side can sustain economic pain for longer. While lower oil revenues could gradually undermine Iran's ability to finance military operations and support its wartime economy, the costs are not borne by Iran alone.