JPMorgan: U.S. Navy blockade will force Iran to cut oil production

Jinse Finance reported that on April 22, JPMorgan stated in a research report that if the U.S. Navy successfully carries out a maritime physical blockade, it will force Iran to cut its oil production. Analysts including Natasha Kaneva wrote in a report issued on April 21: Such blockade measures would not only impose restrictions from a financial perspective but would also directly constrain the total volume of crude oil exports, drastically reducing Iran’s space to conduct trade through circumvention channels and forcing Iran to reduce production over the long term. Iran’s onshore crude oil storage capacity is about 86 million barrels, with a current utilization rate of 54%, leaving approximately 40 million barrels of available storage—the equivalent of around 22 days’ worth of oil exports. In addition, around four supertankers linked to Iranian operations are anchored in the Strait of Hormuz, with a total capacity of about 8 million barrels of crude oil, which could extend the export deadline to roughly 26 days. If export routes are completely cut off, Iran will be forced to start reducing production in around 16 days; by about day 30, the scale of production cuts will continue to increase until crude oil exports are almost entirely halted, with daily production cuts reaching approximately 1.9 million barrels. The analysts added that while this blockade might strengthen the U.S. position in negotiations, this depends on rigorous and sustained enforcement of such measures, which are expected to last several months. (Dongxin News Agency)