JPMorgan: U.S. Navy Blockade Will Force Iran to Cut Oil Production

On April 22, JPMorgan stated in a research report that if the U.S. Navy successfully implements a maritime blockade, it will compel Iran to reduce its oil production. Analysts Natasha Kaneva and others wrote in a report released on April 21 that such blockade measures would not only impose financial restrictions but also directly limit the total volume of crude oil exports, significantly constraining Iran’s ability to conduct trade through alternative channels and forcing long-term production cuts. Iran’s onshore crude oil storage capacity is approximately 86 million barrels, with a current utilization rate of 54%, leaving about 40 million barrels of available capacity, which is sufficient to support around 22 days of oil export volume. Additionally, there are about four very large crude carriers associated with Iranian operations docked in the Strait of Hormuz, capable of carrying approximately 8 million barrels of crude oil, which could extend the export timeline to about 26 days. If export routes are completely cut off, Iran will be forced to initiate production cuts in about 16 days; by around the 30th day, the scale of the cuts will continue to increase until crude oil exports are nearly completely halted, with a daily reduction of approximately 1.9 million barrels. The analysts added that this blockade could enhance the U.S. negotiating position, provided that the blockade measures are strictly enforced and sustained over the long term, which is expected to last for several months. (Dongxin News Agency)