Summary

Iran’s oil export revenue is drying up as a US naval blockade strangles shipments from the Persian Gulf and offshore stockpiles feeding China dwindle, increasing the pressure on Tehran’s already battered economy. As a US naval blockade obstructs Persian Gulf shipments and offshore oil stockpiles dwindle, Iran’s economy is continually waning, according to a Monday Wall Street Journal report. Since the US reinstated its naval blockade in mid-July, no Iranian oil has passed through, the report said, citing maritime shipping data platform Kpler. Despite Iran continuing to load small amounts of oil onto ships, the barrels remain stuck inside the Gulf, the report explained. US Treasury Secretary Scott Bessent said in a post on X/Twitter on Friday that since the reinstatement of the blockade, “no Iranian crude cargoes have successfully transited the Strait of Hormuz to China.” The post also contained a “Jaws” graphic of a shark and a chart depicting Iran’s falling oil exports and currency. “Inventory cannot be replenished as crude piles up aboard vessels trapped inside the strait. Iran’s export lifeline is being cut off: stranded oil, finite storage, and rapidly shrinking revenue,” he said. Iranian oil had fallen from 90 million barrels in mid-July to around 29 million barrels, with the oil possibly running out next month, the WSJ reported, citing Kpler. Additionally, the WSJ said that Kpler data show that Iran loaded 255,000 barrels per day onto vessels in the Gulf in August, 85% below the February-April average. Shipping traffic via Strait of Hormuz stays below 10-day average, data shows Six commodity vessels transited the Strait of Hormuz on Tuesday, down from nine a day earlier and below the 10-day average of about 12, preliminary shipping data showed on Wednesday. The figures could change as some ships typically switch off their transponders during the voyage. Of the six vessels, five were entering, and one was exiting, initial data from ship tracker Kpler showed at 0200 GMT. They included one Panamax and one intermediate tanker. Meanwhile, 25 commodity vessels transited the Bab el-Mandeb strait on Tuesday, another major maritime chokepoint in the Middle East, with 11 vessels entering and 14 exiting. This compares with an average of around 27 ships going through Bab el-Mandeb over the past 10 days. Among the vessels traveling through the strait were two Suezmax tankers, eight Aframax tankers, and one Very Large Crude Carrier. As the US war on Iran enters its seventh month, American tactics to choke Tehran’s economy have plunged the Iranian rial, caused inflation to soar, and continue to slide the country’s economy deeper into crisis, said the report. Inflation in Iran is more than 80% year-over-year, with the International Monetary Fund forecasting a 5.4% economic contraction for 2026, a figure the WSJ says is the country’s worst since the 1980s. The results are testing the US’s bet that economic difficulty will force Iran to concede to US demands, according to the WSJ, but Gulf officials and analysts warn that it could instead provoke more retaliation from Iran. Economist Hamad Hussain said that results will depend on “the degree of economic pain that the Iranian regime is willing to bear to achieve its military and geopolitical objectives,” according to WSJ’s report. “The US campaign will have a significant effect on the average Iranian household. But in terms of Iran capitulating at the negotiating table? I have a lot of doubts,” the WSJ cited Ellie Geranmayeh, an Iran expert at the European Council on Foreign Relations, as saying. “The evidence we have suggests the Iranian regime is likely to resist. Meanwhile, the US continues to issue new sanctions on Iran and other institutions accused of aiding its presence on the global financial stage. Bessent announced on Tuesday a fresh round of sanctions under the Trump administration's “Operation Economic Outcast.” “We promised severe consequences for those providing financial lifelines to the Iranian regime. Today, we followed through on that promise with sanctions on companies that continue to support Mahan Air,” said the post. “Let this be a warning to anyone doing business with Iran’s remaining airlines, all of which we sanctioned today: You are at risk of being cut off from the global financial system.” According to the WSJ, roughly a third of Iran’s state budget is funded by oil revenue, which also finances the regime’s military. According to the US Treasury, armed forces, including the Islamic Revolutionary Guard Corps (IRGC), sell crude and supplement budgets by utilizing companies and shadow-fleet networks, many of which have been targets of US sanctions. June’s diplomatic efforts to sign a memorandum of understanding allowing Iran to move large amounts of oil overseas for later delivery, WSJ’s report said, with the country continuing to live off the profits from those barrels. Iranian Oil Minister Mohsen Paknejad said on Friday that “the process of selling oil and delivering it to customers was carried out thousands of kilometers away from the Persian Gulf and the Sea of Oman,” according to the report. US sanctions could make payments to Iran more difficult However, Kpler estimates that current deliveries of around a million barrels per day, most of which go to China, could deplete oil stocks by mid-October. Payments for previous cargoes would likely dry up by mid-December, said WSJ. And increasing US sanctions could make those payments even harder to collect. Not only has Iran been forced to cut production due to the blockade, but land routes only allow a small amount of oil to be transported, according to the report. No more than 40,000 barrels a day via trucks could be moved, a sliver of prewar exports of almost 2 million barrels daily, the WSJ cited head of crude oil analysis at Kpler Homayoun Falakshahi as saying. Petrochemicals, Iran’s second-largest source of earnings, have also suffered due to their dependence on seaborne exports, the WSJ said. Loadings have fallen around two-thirds since early 2026, according to Kpler estimates. Meanwhile, the US has continued to guide convoys from other Gulf producers through the Strait of Hormuz, while Saudi Arabia and the UAE have been transiting through pipelines that bypass the waterway, the report explained. Iran's overall trade has also fallen since last year Nonetheless, Iran’s overall trade is continuing, though at numbers lower than last year’s The regime exported almost $15 million of other goods between mid-March and mid-August, WSJ reported, citing Iranian media. Saudi officials have warned that Iran is providing more weapons, personnel, and intelligence to Yemen’s Houthis, threatening Saudi shipping and infrastructure and another possible shipping chokepoint, said the report. On Tuesday, the Iran-backed terror group attacked four cities in Saudi Arabia, wounding 73 people, setting oil installations ablaze, and continuing to threaten shipping at the mouth of the Red Sea. Reuters contributed to this report.