An intensifying U.S. naval blockade of Iran is aimed at inflicting such severe economic pain that Tehran will be compelled to quickly submit to Washington’s demands to reopen the Strait of Hormuz and abandon its nuclear ambitions.
With crude exports from Iranian ports effectively stopped up, the country will be deprived of a large chunk of its oil revenues. It could also be forced to start shutting down oil wells within weeks as it runs out of storage space, a costly and damaging prospect that could impair production for years to come.
U.S. officials said Thursday that the blockade, initially focused on ships headed to and from Iranian ports, would expand to cover all so-called shadow-fleet vessels that serve Iran’s oil exports. The Pentagon said it was prepared to board those ships wherever they are in the world.
The growing scope of the U.S. interdiction effort appeared designed to speed the impact on Iran, as pressure grows on President Trump to wind things down and mediators try to get the two sides back to the negotiating table. Beyond the effects on oil, the expanded blockade could enable the U.S. to board ships carrying materials Iran may need for its economy or war effort.
In essence, Trump, who failed to force Iran to open the Strait of Hormuz through actual war, is banking on an economic assault to do the job.
In as little as two to three weeks, Iran could hit a moment known in industry parlance as reaching “tank tops”—essentially running out of room to store the oil it is pumping out of the ground—according to Vortexa, Kpler and Energy Aspects, which track the industry.
Data on the exact size of Tehran’s oil facilities are opaque, and other analysts have suggested Iran could have more flexibility.
Iran’s response to the blockade has so far been muted. It is possible that Tehran feels it can absorb the pain of a prolonged oil shutdown, just as it withstood the military assault and the killings of its top leaders.
Its options include restarting hostilities or following through on threats to unleash Houthi proxies in Yemen to choke the Red Sea’s Bab al-Mandeb Strait—an outlet for millions of barrels of Saudi Arabian oil that has continued to flow through the war. It could also force a confrontation by sending oil-laden tankers through the strait.
“It’s hard to see how Iran is able to withstand this economically,” said Max Meizlish, a former U.S. sanctions official and a research fellow at the Foundation for Defense of Democracies, a Washington think tank that advocates a tough approach on Iran.
Under what the administration calls Economic Fury—an echo of the broader Operation Epic Fury—the Treasury Department said this week that it won’t renew a short-term oil waiver allowing the sale of sanctioned Iranian oil expiring Sunday.
The department also targeted an illicit oil-smuggling network run by Iran’s elite, sanctioning more than two dozen people, companies and vessels. The Treasury threatened sanctions against global banks aiding Tehran.
The U.S. blockade applies to “all ships, regardless of nationality, heading into or from Iranian ports,” Gen. Dan Caine, chairman of the Joint Chiefs, said Thursday. The operation would pursue any Iranian-flagged vessel or any vessel attempting to provide material support to Iran, he said.
Like a ticking clock, the administration’s hope is that pressure on Iran’s oil industry will increase the longer the blockade endures.
“The intention of the blockade is to neutralize the leverage Iran holds over the Strait of Hormuz and to increase the economic pressure for Iran to agree to a deal,” said Richard Bronze, co-founder and head of geopolitics at Energy Aspects. He added that it was unlikely the blockade alone would force the regime to rapidly capitulate in talks.
A crippling blow isn’t guaranteed against a regime armed with buffers and a long history of defying economic squeezes.
Tankers that make it through the blockade can still be loaded, even if they remain trapped in the Gulf, stretching Iran’s tank-tops deadline. Satellite imagery showed three tankers capable of carrying five million barrels of oil loading on Kharg Island, Iran’s oil export hub, according to TankerTrackers.com, a research firm.
Iran also has roughly 160 million barrels of Iranian oil already loaded on tankers at sea, Vortexa estimates. Some of it floats outside the Gulf near buyers in Asia, allowing Iran to sell oil for weeks even if it starts cutting production.
“They have a bit of a cushion to fall back on,” said Gregory Brew, a senior analyst on Iran at consulting firm Eurasia Group.
Iran’s crude output has proved resilient. Its March exports, at around 1.87 million barrels a day, are around the same level as March last year, according to Kpler.
That dynamic allowed Tehran to reap a wartime windfall from surging global oil prices. The reprieve from U.S. sanctions further swelled those profits. Whereas, Iranian oil traded at a wide discount to the global Brent benchmark before the war, in recent weeks, some cargoes have fetched a rare premium.
It is a situation that researchers at Rystad Energy call “the key asymmetry of the crisis.”
The “Hormuz closure was devastating for Gulf producers that depend on open, insured, mainstream shipping. It was less devastating for the one producer whose trade had already migrated into dark-fleet and sanctions-adapted channels,” they wrote in a recent report.
Now, the U.S. blockade threatens to strip Tehran of its asymmetrical advantage.
Iranian onshore storage—with a capacity of up to 120 million barrels—is currently over half full. At current export rates, that space would be exhausted in less than three weeks, Bronze said.
If those tanks top out, Tehran will be forced to shut in active wells—a drastic measure risking permanent infrastructure damage.
Halting the pressurized flow in mature reservoirs disrupts a delicate subterranean system, allowing water to flood the wellbore and heavy sediments to clog rock pores. Some wells forced offline may only ever recover a fraction of their prior volume or become economically unviable.
Tehran has repeatedly proven adept at pumping oil under intense sanctions. Last year, despite years of sanctions and a domestic currency crisis, Tehran sold more crude than in any year since 2018.
To move sanctioned barrels, the regime leaned heavily on its shadow fleet—a clandestine tanker network used to evade sanctions. Tehran has a willing buyer for its oil in China, where independent “teapot” refiners scooped up the cargoes, often at major discounts to benchmark oil prices.
All the same, storage is likely to fill up quickly if the blockade succeeds, according to David Wech, Vortexa’s chief economist. “There is also not too much time for the Iranian side if they are not able to export crude,” he said.
Write to Georgi Kantchev at georgi.kantchev@wsj.com
