Total Iranian crude stockpiles outside the Persian Gulf have plummeted to 83 million barrels, down from over 100 million before the blockade intensified in mid-July. According to Kpler, roughly 40 million barrels remain in floating storage near Singapore, yet only 4 million barrels of that inventory are currently unsold. Analyst Muyu Xu warns that no new Iranian supplies are expected to reach the market for late-September delivery, as the U.S. successfully chokes off shipments from Kharg Island, which typically handles 90% of the country’s exports.
US Blockade Stifles Iranian Oil Flow to Chinese Refiners
The supply of Iranian crude available to Chinese buyers has nearly evaporated as U.S. sanctions tighten their grip on the Persian Gulf. With tankers stalled and export terminals effectively silenced, the world’s largest importer of Iranian oil is now scrambling to secure alternative feedstocks before inventories hit critical lows.
This supply crunch has sent prices surging; Iranian Light crude now trades at a $3.50 premium over ICE Brent, a sharp reversal from the $3.50 discount seen just one week ago. President Donald Trump’s recent warnings of severe economic consequences for nations maintaining trade lifelines with Tehran have further spooked the market. With stockpiles in Shandong at their lowest level this year, Chinese independent refiners—known as “teapots”—face a difficult choice: pivot to Russian Urals or other alternatives, or risk slashing production throughput by October.
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