DUBAI, United Arab Emirates (AP) 鈥� Even as Iran squeezes world energy supplies with its , its own oil industry is increasingly being threatened by an American blockade.
With no way to export the oil it is pumping out and diminishing room to store it at home, may be forced to dramatically reduce or cease production from some of its wells, perhaps beginning in as little as two weeks, experts say.
The situation likely isn鈥檛 as dire as U.S. President Donald Trump recently described, colorfully suggesting pipelines could start exploding within days. But once shut down, production from the aging wells may not be restarted so easily, if at all, undermining Iran鈥檚 future oil output. Iran appears to have begun dialing back production already, analysts say, to avert outright shutdowns.
The pressure is building as the U.S. Treasury Department on Iranian oil shipments already at sea. The U.S. military has seized at least two tankers off Asia believed to be carrying Iranian oil.
With its oil trade constrained, Iran is seeing flow back into an , months of unrest and decades of international sanctions. But with fewer tankers shipping Iranian oil, the effects of are only being magnified, leading to shortages of jet fuel and prices .
Iran’s leaders 鈥渁re really resisting鈥� shutting down oil wells because of how painful that would be long-term, said Miad Maleki, a former sanctions expert at the U.S. Treasury who is now a senior fellow at the Washington-based Foundation for Defense of Democracies.
鈥淭hey鈥檝e been under sanctions, they鈥檝e been isolated for 47 years now. Those oil wells are not maintained well. Their machinery is not maintained well,” Maleki said. Once shut off, he added, the wells won’t easily “snap back after a few months.鈥�
The squeeze on Iran intensifies
Iran had been pumping over 3 million barrels of crude oil a day before the war, with a little more than half going toward its domestic market. But since the American blockade began on April 13, ships have been filled with oil and unable to get out.
鈥淚t looks like there鈥檚 been a significant slowdown in production,鈥� said Antoine Halff, the co-founder and chief analyst at Kayrros, an environmental intelligence company that tracks emissions and energy supply chains. He pointed to signs that storage is not filling as fast as usual at Kharg Island, Iran鈥檚 main oil export terminal in the Persian Gulf.
Iran is likely storing some of its oil in tankers positioned around Kharg Island, Halff noted.
Kpler, a firm monitoring commodities markets, said it believes Iran has enough capacity left to store about two weeks worth of oil production, even after reducing output.
鈥淲hile the immediate revenue impact is limited, operational constraints are now forcing production cuts and setting up a delayed but significant financial squeeze,鈥� wrote Homayoun Falakshahi, an analyst at Kpler.
Wood Mackenzie, another oil analysis firm, estimates Iran will run out of storage capacity in about three weeks.
鈥淚f the blockade persists, cuts become inevitable,鈥� wrote Alexandre Araman of Wood Mackenzie. Shutdowns of more than a month 鈥渞isk long-term damage鈥� to Iran鈥檚 oil reservoirs, he wrote, adding that recovering older fields 鈥渞emains uncertain.鈥�
Iran鈥檚 oil industry long a shaky lifeline
From the moment it first struck oil in 1908, Iran鈥檚 oil industry has been entangled in the region鈥檚 politics. A move to nationalize Iran鈥檚 oil fields and wrest control from the British sparked the CIA-backed 1953 coup that cemented Shah Mohammad Reza Pahlavi鈥檚 rule. That also lit a long fuse to Iran鈥檚 1979 Islamic Revolution that toppled the shah. During the revolution, oil workers went on strike and brought production down from 6 million barrels a day to around 1.5 million.
Iran鈥檚 oil industry never recovered and faced decades of international sanctions, during which its infrastructure aged and faltered.
In his first term, Trump exerted a 鈥渕aximum pressure鈥� campaign, hiking sanctions to severely cut Iran鈥檚 oil exports. Forced to store oil in tankers at sea, the Iranian government lost tens of billions of dollars in revenues. Still, the pressure failed to push Tehran into reaching a nuclear deal with the U.S.
Now Iran faces a combination of hiked sanctions and the blockade. Trump on Tuesday claimed that Iran was 鈥渋n a 鈥楽tate of Collapse.鈥欌��
U.S. Treasury Secretary Scott Bessent piled on, writing on X, 鈥淚ran鈥檚 creaking oil industry is starting to shut in production thanks to the U.S. BLOCKADE. Pumping will soon collapse. GASOLINE SHORTAGES IN IRAN NEXT!鈥�
There have been no immediate signs of any gasoline shortages in Iran. However, Iran does seem to be acknowledging some of the pain indirectly.
A segment on state TV, which is run by hard-liners, included journalists discussing the possibility of an oil storage crisis. One noted that if empty tankers get blocked from returning to Iran, 鈥渨e won鈥檛 be able to export.鈥� Oil Minister Mohsen Paknejad on Monday praised oil terminal staff for their 鈥渃ontinuous perseverance.”
Maleki, the analyst from the Foundation for Defense of Democracies, said that if the blockade continues and production slows further or halts, oil workers could potentially lose their jobs 鈥� which could cause new unrest.
鈥淚n 1979 when the oil industry was disrupted, in the 1980s war with Iraq … you can go and look at to see how effective they were in really pressuring the regime,鈥� he said. 鈥淚t鈥檚 really going to affect some of the most strategic provinces in Iran and the most strategic industry.鈥�
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EDITOR鈥橲 NOTE 鈥� , news director for the Gulf and Iran for The Associated Press, has reported from each of the Gulf Cooperation Council countries, Iran and other locations across the Mideast and the wider world since joining AP in 2006.
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