By Eric Vandenbroeck and co-workers

Tehran is facing a looming oil storage crisis

A United States naval blockade on Iran is strangling the Islamic Republic’s main economic corridors – leaving Tehran facing a looming oil storage crisis and its citizens grappling with rising food prices and surging unemployment.

And as much as Iran is suffering, its leaders will be aware that Trump is under pressure too, with the US president facing growing backlash over the war domestically and crucial midterms looming. Tehran may have calculated that Trump will blink first. And as much as Iran is suffering, its leaders will be aware that Trump is under pressure too, with the US president facing growing backlash over the war domestically and crucial midterms looming. Tehran may have calculated that Trump will blink first.

Only three months ago, the Iranian government was on the brink of collapse after people took to the streets nationwide to protest the poor handling of the economy. That same government was given a lifeline when the US and Israel launched its attacks, and it is now using the pretext of war to justify dire economic conditions to a nation of 92 million.

What began as a blockade of Iranian ports more than ten days ago has expanded globally, with every ship tied to Iran facing scrutinous monitoring by US naval forces throughout its voyage.

One of the main outcomes of the blockade would be to render Iran incapable of exporting its main commodity. If the country cannot shift the millions of barrels of oil it produces daily, it could be forced to cut production. Crude oil and petroleum product exports are Iran’s primary source of foreign currency.

Iran could probably sustain current oil production for another two to three months before storage issues become “a significant consideration,” Batmanghelidj said.

Iran also still has plenty of onshore oil storage capacity, shipping analytics firm Kpler said, noting it has almost 30 million barrels of headroom, which means it’s still weeks away from its limit.:

The ongoing US naval blockade heavily restricts these southern terminals even beyond the Strait of Hormuz.

War with Iran has also threatened the world’s supplies of aluminum, plastics, and rubber. The Middle East ships about 25% of the world’s polypropylene and 20% of polyethylene, two of the most-used plastics. It also accounts for a quarter of the world’s sulphur and 15% of its fertilizer.

Vessels coming from or going to Iranian ports have been turned around, Hegseth said, noting 34 vessels had been intercepted in the region as of Friday, with two other Iranian-linked ships seized in the Indo-Pacific. In public, at least, the US stresses it won’t back down.

“A blockade as long as it takes, whatever President Trump decides,” Hegseth said.

Vessels coming from or going to Iranian ports have been turned around, Hegseth said, noting 34 vessels had been intercepted in the region as of Friday, with two other Iranian-linked ships seized in the Indo-Pacific. In public, at least, the US stresses it won’t back down.

“A blockade as long as it takes, whatever President Trump decides,” Hegseth said.

 

Be considerate, Supreme Leader says

Should Iran be compelled to turn to alternative import routes, such as its land borders or the Caspian Sea to the north, this could push the already escalating prices of goods even higher.

One million jobs have already been lost in Iran, and the employment of two million people has been affected because of the war, state-affiliated media said, citing Iran’s deputy labor minister, Gholamhossein Mohammadi.

Another 130,000 workers have lost their jobs after their factories were struck, Iran’s Labor Ministry official Alireza Mahjoub told the Iranian Labor News Agency (ILNA).

The Iranian government has maintained that there are no shortages of goods and that, despite “pressures, sanctions, and maritime restrictions,” the country’s food supply chain is fully functioning with 85% of agricultural products and basic goods produced domestically.

A Tehran resident confirmed that markets remain stocked, although prices of basic goods such as chicken, rice, eggs, and medicine have tripled or even quadrupled.

But while many US voters have been alarmed at rising gas prices, Iranians are more accustomed to such hardships.

The country’s president, Masoud Pezeshkian, acknowledged that there are some shortages in fuel that require “careful planning” and “public cooperation,” but described what the government has achieved as “divine grace.”

Iran’s new Supreme Leader, Mojtaba Khamenei, who has not been seen or heard from since his appointment last month, called on people in a written statement “to be considerate of one another so that the pressures caused by shortages – which are a natural effect of any war – are reduced on different segments of society.”

This weekend has seen tentative signs of movement on talks, with US envoys expected to follow Iran’s top diplomat to Pakistan, where mediators are keen to restart negotiations. But Tehran has weathered decades of US hostility and, unlike Washington, has more than short-term considerations at play.

 

 

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