Iran has begun to cut the output of its oil wells and its storage capacity will run out in about a month, the New York Times reported.
While Iran and the United States discuss a possible agreement to end the war, the US naval blockade continues to make life miserable for the Iranian economy and provides Iran with a strong incentive to reach an agreement. In the New York Times it was reported that in recent weeks Iran is facing a tremendous economic crisis that reaches almost all corners of society, and that in about a month the country’s oil storage will run out, which will lead to long-term damage to the oil wells.
“The naval blockade is a much more serious threat than even war, and the current stalemate must be broken because our oil and energy exports and the future of our refineries are now at risk,” said Hamid Hosseini, an expert on the Iranian oil industry and a member of the Energy Committee of Iran’s Chamber of Commerce, in an interview with the New York Times.
According to data from the maritime information company Kpler, the oil storage content may run out in Iran in about 25 to 30 days if the blockade is not lifted. An Iranian oil ministry official told the American newspaper that Iran has already started cutting output in some of its oil fields to reduce the storage crisis. The source estimated that there are 40 to 45 days left until the land and sea storage capacity is completely filled.
Information company TankerTrackers announced that there is still plenty of storage space on Kharg Island, Iran’s main oil terminal. According to estimates, in the absence of storage space, Iran will be forced to make massive cuts in the output of some of its oil wells, which may lead to long-term damage to them.
The economic crisis and the attempt to circumvent the blockade
Iran is trying to find ways to bypass the blockade of Iranian ports in the Strait of Hormuz, but with limited success. According to the report in the New York Times, it began transporting goods by truck through Pakistan and Turkey, receiving goods through the Caspian Sea from Russia, and using a railway that connects China to Iran through Turkmenistan and Kazakhstan. However, there is no real substitute for passing through the Strait of Hormuz, which is responsible for a huge part of the Iranian economy’s exports and imports.
| Photo: department of war
The US naval blockade added great economic difficulty to the economic distress brought about by the war, which in turn added to the severe economic distress that existed in Iran even before the campaign. The value of the Iranian currency, the Rial, continues to fall – and 1.3 million Rials equal one dollar. Inflation in the country reached a peak of 60%, a million jobs were lost and layoffs reached almost every sector of the economy.
The New York Times reported that many public sector workers have not received a full salary for at least two months. The economic crisis has led workers to transport cooking oil across the border with Turkey, and social media is filled with stories of Iranians forced to empty savings and sell personal belongings to survive.