Iran’s oil industry is under mounting pressure as sanctions and a US naval blockade in the Strait of Hormuz choke exports, leaving millions ofbarrels of crudewith nowhere to go. At the centre of the crisis is Kharg Island, which accounts for over 90% of Iran’s oil exports and can store up to 30 million barrels. With storage rapidly nearing capacity, Tehran has been forced into an unusual move, reviving a 30-year-old tanker, Nasha, to hold excess crude at sea.
The vessel, long idle and unused, is now being redeployed as floating storage, offering temporary relief as onshore facilities approach their limit.
Maritime analysts told the Gulf News that the situation is fast approaching a tipping point. With only about 13 million barrels of storage space remaining and net inflows estimated at 1 to 1.1 million barrels per day, capacity could be exhausted in less than two weeks.
Satellite imagery from TankerTrackers, dated April 16, shows at least three tankers loading a combined 5 million barrels from Kharg Island, underscoring that production continues even as exports stall.
If storage fills up completely, Iran may be forced into a difficult choice: cut production or risk long-term damage to its oil fields. Oil that cannot be stored cannot be produced and without exports, it cannot generate revenue, tightening the economic squeeze on Tehran.
US Treasury Secretary Scott Bessent has already warned that Iran is nearing its storage limits, signalling growing concern over the unfolding crisis.
Halting oil output is far more complex than turning off a tap. Oil reservoirs rely on a delicate balance of underground pressure to keep crude flowing. Disrupting this balance, especially in mature fields, can allow water to seep into reservoirs, permanently trapping oil and reducing long-term recovery.
For Iran, particularly in water-injection fields, shutting wells could lead to irreversible damage and lasting production losses.
The reactivation of the tanker Nasha suggests Tehran’s attempt to buy time. By shifting excess crude offshore, Iran is trying to ease pressure on vulnerable onshore storage infrastructure while keeping production steady.
However, analysts stress that this is only a short-term workaround. If the blockade persists and exports remain constrained, Iran will soon face a stark decision: scale back production or risk damaging its oil fields for years to come.
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