Iran loses major revenue stream as overseas oil stockpile runs out

Iran’s overseas oil stockpiles run dry as US blockade cuts off billions in revenue.

By World Israel News Staff

Iran has exhausted its remaining oil stockpiles in Asian waters after months of an American naval blockade prevented the Islamic Republic from replenishing supplies, eliminating a critical source of revenue as the country’s economic crisis deepens, according to shipping data reported Thursday by the Wall Street Journal.

The depletion of the offshore reserves marks a major development in Washington’s campaign to isolate Tehran economically and deprive the regime of funds needed to sustain its military operations and rebuild infrastructure damaged during the war.

Before the conflict began in February, Iran had approximately 135 million barrels of crude oil stored aboard tankers outside its territorial waters, much of it near Malaysia and Singapore. The stockpile, worth an estimated $10 billion or more, allowed Tehran to continue supplying Chinese refineries even after American forces began restricting Iranian maritime exports.

According to shipping analytics company Kpler, those reserves gradually diminished as oil continued flowing to China without replacement shipments arriving from Iran.

A temporary easing of the American blockade during diplomatic negotiations in June allowed Tehran to rebuild its offshore inventories to approximately 90 million barrels. However, after Washington reinstated the blockade in July, the stockpiles began declining rapidly.

By October 5, less than one million barrels remained, and the last available shipments were discharged in China by mid-October.

“Iran’s oil on water outside the blockade has fallen to zero,” Homayoun Falakshahi, Kpler’s head of crude oil analysis, told Al-Monitor earlier this week.

“This is the first time Iran has faced such a challenge in its modern history,” he added.

The disappearance of the stockpiles has compounded the impact of an American campaign that has prevented Iranian tankers from delivering newly produced crude to foreign buyers.

US Central Command commander Admiral Brad Cooper said last week that American operations had prevented Iran from exporting at least $25 billion worth of crude oil, dealing a major financial blow to the Islamic Revolutionary Guard Corps and the broader regime.

The blockade has imposed “a devastating cost” on Iran’s security apparatus, Cooper said.

“We sank Iran’s navy, we destroyed its weapon factories, and we curtailed the IRGC’s ability to launch ballistic missiles and drones,” he added.

The restrictions have also stranded dozens of Iranian-linked tankers in Asian waters, including approximately 20 vessels near Sri Lanka. Some have reportedly experienced shortages of fuel, food and fresh water as American pressure discourages local suppliers from servicing sanctioned ships.

For years, Tehran relied on an elaborate network of tankers, ship-to-ship transfers and intermediaries to circumvent Western sanctions and deliver oil to China, its principal customer.

The American blockade has disrupted that network by physically preventing tankers from transporting replacement shipments beyond the Persian Gulf.

Iran has attempted to develop alternative export routes, including transporting oil overland and using older vessels for storage, but analysts say these arrangements cannot replace the enormous volumes previously shipped by sea.

Chinese refiners have meanwhile begun purchasing additional crude from alternative suppliers, including Brazil and West African countries, raising questions about whether Iran will be able to recover its former market share even if restrictions are eventually lifted.

The economic consequences could be severe for Tehran. Oil sales ordinarily account for approximately 30% to 40% of government revenue and represent the country’s largest source of foreign currency.

The Iranian rial has lost roughly one-third of its value against the US dollar since early July, while inflation has accelerated and the government faces mounting difficulties financing imports and public expenditures.

US Treasury Secretary Scott Bessent predicted in late September that Iran would soon exhaust its remaining overseas supplies.

“They are going to make their final deliveries of oil to China, and then they will have nothing,” Bessent said during an interview with Fox News.

The Trump administration hopes that depriving Iran of oil income will force Tehran to accept American demands in negotiations over its nuclear program and regional activities.

However, Iranian officials have publicly rejected claims that their economy is approaching collapse.

Speaking at the International Monetary Fund’s annual meetings in Bangkok last week, Iranian Central Bank Governor Abdolnaser Hemmati insisted that the country had successfully resisted American economic pressure.

“Despite all these pressures, the Iranian economy has demonstrated very good resilience,” Hemmati said, dismissing predictions of an imminent collapse as “nothing more than an illusion.”

While the remaining offshore crude has been exhausted, Iran could still receive payments for shipments previously delivered to Chinese buyers, with analysts estimating that some outstanding revenue could continue arriving into December.

The collapse of the floating stockpile also does not mean Iran has exhausted its domestic petroleum reserves. Rather, it has lost access to the overseas inventories that allowed it to continue earning export revenue despite the blockade.

Meanwhile, oil exports from other Persian Gulf producers have recovered to above prewar levels, aided by American naval protection and alternative shipping routes.

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