Iran can endure US blockade for months without major economic crisis: Report

The United States’ military blockade of Iran’s ports is likely to cut Tehran off from vital oil revenue, but NBC News reported on Saturday that the country could likely endure the pressure for months without a major economic crisis or lasting harm to its oil industry, possibly dimming US hopes of forcing a quicker end to the war.

After the blockade began about a month ago, President Donald Trump and senior administration officials suggested it would quickly trigger a crisis in Iran’s oil sector.

Trump said Iran’s oil infrastructure could “explode” within days if exports stopped. “If they don’t get their oil moving, their whole oil infrastructure is going to explode.”

That prediction did not come true, though the blockade has stopped dozens of Iranian tankers near the Strait of Hormuz.

Iran has slowly reduced oil production because of the blockade and could run out of storage space within two months, potentially forcing some wells to shut down.

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Still, the report said that Iran may avoid major shutdowns because much of its oil can be refined and used domestically, keeping most fields operational.

“They’re going to have to shut down about half of their production. They can keep producing because they can refine it domestically,” said Robin Mills of Qamar Energy consulting and the Centre on Global Energy Policy at New York’s Columbia University.

Gregory Brew of the Eurasia Group said Iran has experience in reducing oil production after doing so twice in the past 15 years under US sanctions.

“I don’t think it’s going to do tremendous damage to their infrastructure,” Brew said. “They know how to do this. They’ve done it before.”

According to Brew, Iran has responded by cutting the amount of oil loaded onto tankers from about 11 million barrels per week to roughly 6-8m.