Can Iran Outlast the U.S. Naval Blockade of Its Oil Exports with Shadow Tankers and China’s Independent Refiners?

The U.S. naval blockade is curbing Iran’s oil export flows and swelling inventories, but gaps in enforcement are enabling workarounds such as floating storage and evasive shipping. Combined with continued purchases by China’s independent refiners, these flows are sustaining Iran’s limited exports and delaying the point at which storage constraints force production cuts with potentially lasting economic consequences.

The United States has tightened a maritime cordon around Iranian oil exports since mid-April, intercepting vessels and turning back shipments in a bid to choke off the country’s primary revenue stream. By April 26th, six tankers laden with an estimated 10.5 million barrels of Iranian oil had reversed course and headed back to Iranian terminals following swift U.S. Navy interdictions, according to satellite imagery sightings cited by TankerTrackers.com.

Washington expects that the loss of oil revenues, which in normal conditions can run into the hundreds of millions of dollars per day, is likely to intensify pressure on Iran’s economy by tightening foreign exchange supply and exacerbating inflationary strains, and increase the domestic pressure on Tehran’s leadership.

Also, beyond curbing Iran’s oil revenues, the U.S. naval blockade is also aiming to force Tehran into a choice, which is to either halt crude production or reach an agreement with Washington to secure relief.

Per the media reports citing satellite tracking data, Iran’s crude inventories have surged since the U.S. blockade took effect, with stockpiles building so quickly after enforcement tightened that exports appeared to have largely stalled.

Data from the Columbia Center on Global Energy Policy (CGEP) showed inventories rose by more than 6 million barrels between April 13th and April 21st, including a particularly sharp increase of about 1.7 million barrels per day from April 17th to April 21st. As of April 20th, storage tanks at Kharg Island were roughly 74% full after the terminal absorbed about 3 million additional barrels, according to CGEP.

Industry practice typically keeps tanks below 80% capacity to maintain safety margins, manage emissions, and preserve operational flexibility. However, Iran and other major producers have breached this threshold in the past, notably during the COVID-19 crisis. In April 2020, storage levels at Kharg Island climbed to nearly 90% capacity, marking a record high for the facility.

Once Iran runs out of crude oil storage capacity, it will be forced to shut down its oil production, which can be very damaging to its production capacity.

Prolonged shutdowns can erode reservoir pressure, allow water or gas to intrude, and disrupt flow dynamics, making crude harder and costlier to extract. After that, restarting production is also complex, often requiring repairs to degraded equipment and clearing obstructed pipelines.

However, Iran still has scope to delay the point at which storage capacity is exhausted. Analysts at TankerTrackers.com have pointed out with evidence that the U.S. naval blockade has not been fully watertight. While oil-laden shipments have struggled to exit, empty tankers have continued to enter, meaning Tehran still has the possibility of sustaining its production until around mid-June by relying on floating storage alone.

“Empty tankers have been entering the perimeter. Depending on loading rate, Iran could handle another 4-6 weeks in tanker loadings provided no additional empty tankers arrive. Add to that, vacant storage capacity on shore,” the consultancy said in a post on X.

Now, that is just based on the observations by the experts at TankerTrackers.com. According to the cargo tracking group Vortexa, at least 34 tankers linked to Iran have managed to bypass the U.S. naval blockade since it was imposed.

Of these, 19 vessels exited the Persian Gulf through restricted waters, while another 15 entered from the Arabian Sea en route to Iranian ports, underscoring continued two-way maritime flows despite tightened enforcement.

At least six of the departing vessels were confirmed to be carrying Iranian crude, with total cargoes estimated at around 10.7 million barrels. Given that Iranian oil typically trades below Brent crude, a discount of about US$10 per barrel would place the value of those shipments at around US$ 910 million.

The figures highlight gaps in the blockade’s effectiveness, with several of the vessels believed to be carrying crude oil, allowing Tehran to sustain a portion of its export activity even under blockade. The movements also suggest that enforcement remains uneven, as both outbound shipments and inbound tanker traffic continue, complicating efforts to fully isolate Iran’s oil trade.

China remains a crucial outlet. Despite mounting U.S. pressure, China’s independent refiners have maintained imports of Iranian crude. More than 140 million barrels of Iranian oil are currently estimated to be in transit globally, enough to last more than two months of China’s Iranian oil purchases and provide a short-term buffer for Tehran’s export revenues against the disruptions due to U.S. blockade.

Overall, though, while Iran’s maritime workarounds are extending its endurance, its ability to wait out the U.S. Naval blockade ultimately hinges on how long it can sustain crude production without overwhelming storage capacity, and whether its shadow export channels remain viable under tightening enforcement.

So, empty tankers and covert logistics may have bought Tehran valuable time, but they do not eliminate the underlying constraint: without steady export outlets, the system will eventually reach its limits.

Tanmay Kadam is a geopolitical observer based in India. He has experience working as a Defense and International Affairs journalist for EurAsian Times. He can be contacted at tanmaykadam700@gmail.com.