Blockade succeeds where sanctions failed as Iran oil exports stall

For the first time on record, Iran has gone about seven weeks without shipping meaningful crude exports through the Strait of Hormuz, as a US naval blockade succeeds where years of sanctions failed by cutting off one of Tehran’s main sources of foreign-currency earnings.

Unlike previous sanctions campaigns, when Iranian crude continued reaching buyers despite restrictions, the current blockade has stopped fresh crude cargoes reaching China, Tehran’s only major remaining oil customer, increasing pressure on government finances and foreign-currency reserves.

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Since the US reinstated its blockade on Iran on July 14 as part of their six-month conflict, no Iranian crude cargoes have successfully transited the Strait of Hormuz to China, according to Kpler, Vortexa and TankerTrackers.com.

As a result, Iran can only sell crude to China from floating storage in Asia, which it cannot replenish as crude accumulates aboard tankers inside the strait.